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Complaints about fraudulent security alarm sales are on the rise

Fear sells so scammers and unscrupulous alarm companies often use alarming (and sometimes false) crime statistics and scare tactics as a sales pitch.
Image: Home Sales
Some door-to-door con artists will try to convince you that they represent (or are working with) your current alarm company to “upgrade” your system. sturti / Getty Images/iStockphoto

Home security systems are supposed to protect you from criminals, but rogue alarm companies and dishonest sales people have figured out ways to rip off people who already have a system or who want to buy one.

“Complaints about home alarm sales are now an area of particular concern,” according to the 2017 Consumer Complaint Survey Report released in July. This annual report from the Consumer Federation of America (CFA) is based on surveys of state and local consumer protection agencies.

The problems reported by disgruntled homeowners ranged from misleading sales claims and scare tactics to outright fraud.

“We’re concerned about these alarm sales abuses because it's very easy to rope people into these deals,” said Susan Grant, CFA director of consumer protection and privacy. “Many of the consumers involved are elderly or disabled and don't really understand what's going on.”

Deception 1: Scare tactics

Fear sells security alarms, so scammers and unscrupulous alarm companies often use alarming crime statistics — that may not be true — as part of their sales pitch. Their mailers are designed to mislead or confuse, often made to look like they’re from your mortgage lender or local government agencies.

Hundreds of new homebuyers in and around Cleveland received a “Community Awareness Bulletin” last year that appeared to be from Cuyahoga County. The bogus letter, complete with the official county logo, warned about home break-ins and home invasions in the area because of the “opioid crisis” and offered a “free home security package.”

A bogus “Community Awareness Bulletin” (provided by the Cuyahoga County Dept. of Consumer Affairs)
A bogus “Community Awareness Bulletin” (provided by the Cuyahoga County Dept. of Consumer Affairs)Cuyahoga County Dept. of Consumer Affairs

The letter was not from the county; it was from an alarm company that was trying to sign-up new customers.

“If someone's trying to scare you into buying something right away, you should slow down, because panic can affect your thinking,” said Sheryl Harris, director of the Cuyahoga County Dept. of Consumer Affairs. “If you decide you are interested in a service, check out the seller's reputation and get quotes from competitors.”

Remember: It’s public information when you buy a house or refinance a loan, so expect to get solicitations from home security companies.

Deception 2: Lies, lies and more lies

Don’t think you’re safe, just because you already have an alarm system.

Door-to-door con artists will try to convince you that they represent (or are working with) your current alarm company to “upgrade” your system. Sometimes, they claim your monitoring service has gone out of business and they have acquired their customers.

Fall for the pitch, and you’ll wind up being double-billed — by your “old” alarm company and the “new” one.

In Georgia, dishonest door-to-door salespeople who told those lies sold nearly 6,000 home alarm systems last year, before the State Attorney General’s Office stepped in. The state’s lawsuit claimed the salespeople also lied when they said police officers living in the area had purchased their system.

“They were very convincing, and thousands of people believed them,” said Shawn Conroy, communications and outreach coordinator with the Georgia Attorney General's office.

But how do the fraudsters know which alarm company you have? They look for the alarm company sign in your yard or the sticker in your window, Conroy told NBC News BETTER.

Karen Griffin is convinced that’s why the crooked salesman showed up at her door and not her neighbor’s house — she had an alarm sign out front. The fraudster convinced Griffin to sign a contract with his company to upgrade her system.

“The only thing they did was change the main keypad at the front door,” Griffin said. “The system never worked after that, but they still wanted us to pay them.”

Fortunately for Griffin, the Georgia Attorney General was able to get refunds for her and the other victims.

Deception 3: Just sign here

It’s not uncommon for door-to-door salespeople to show the customer an electronic contract on their computer and have them agree to it by providing a digital signature. This can result in serious problems.

You can’t properly review a contact on the small screen of a hand-held device. Get a physical copy of that contract, so you can read it and make sure it’s correct.

Consumer confusion: Automatic renewal

If you buy a security alarm system, you may be required to sign up for monthly monitoring for a year or more. Typically, there’s a penalty for early cancellation.

Many alarm contracts have an “auto-renewal” clause that can trap you into a long-term monitoring commitment without your follow-up consent. If you don’t decline to renew at the end of the term, often in writing weeks before the contract period ends, that agreement is automatically renewed for another term.

“It can be pretty sneaky,” said John Breyault, who runs National Consumers League’s “Many consumers don’t understand that they're signing up for an automatically renewing contract.”

The bottom line

Door-to-door sales are always risky because the salesperson is in your home. Don’t let anyone rush you or pressure you into buying something you don’t want. High-pressure sales tactics often indicate a scam. If you feel pressured, there’s no need to be polite — tell the person to leave.

Georgia Attorney General Chris Carr advises against letting anyone into your house without a prescheduled appointment. Your current alarm company will never show up unannounced to “upgrade” your equipment or switch service.

Carr provided NBC News BETTER with these other tips:

  • Always ask to see the salesperson’s ID.
  • If you’re interested in the product or service, ask the salesperson to leave some written materials that you can review, rather than signing a contract or making a purchase on the spot.
  • Never sign a contract without first reading it thoroughly and making sure you understand everything.
  • Get all prices, warranties and cancellation policies in writing.
  • Never pay in cash.

Remember: Door-to-door sales purchases of $25 or more are subject to the Federal Trade Commission’s Cooling-Off Rule, which gives you the right to cancel your purchase within three business days and receive a full refund.

The BBB warns homeowners to beware whenever someone shows up unannounced at your door. The FTC has a tip sheet on avoiding alarm scams and the Electronic Security Association has a own fact sheet on purchasing an alarm system from your doorstep.

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