Security

ADT Settles Lawsuit With NorthStar for $3M

ADT has settled its lawsuit against NorthStar after providing evidence from at least 500 customers who said they were victims of deceptive sales tactics from NorthStar employees.


ADT Settles Lawsuit With NorthStar for $3M
As part of the settlement, NorthStar agreed to a $5 million consent judgment if the company defaults on paying the $3 million settlement.
CE Pro Editors · July 17, 2019

ADT (NYSE: ADT) has settled a deceptive sales practices lawsuit filed against NorthStar Alarm Services, a Utah-based company, for $3 million.

As part of the settlement, NorthStar agreed to a $5 million consent judgment if the company defaults on paying the $3 million settlement.

ADT provided evidence from at least 500 customers stating they were victims of deceptive sales tactics from NorthStar employees over the past five years as part of its case.

“Companies that rely on deceptive sales tactics in order to compete damage the reputation and integrity of our industry. As a trusted leader, ADT is committed to stopping fraud at the front door by continuing to pursue legal action against those companies in our industry that intentionally mislead consumers,” says David Smail, ADT executive vice president and chief legal officer.

ADT has sued and prevailed against several security companies that follow deceptive sales business models over the years.

Less than two months ago, a South Florida jury awarded ADT $4 million in damages, including $1 million in punitive damages, in a similar deceptive sales lawsuit against Alder Holdings, another security company headquartered in Utah.

The company asserted that Alder’s sales representatives canvassed neighborhoods in search of homes with ADT yard signs. The salesmen would then claim to represent ADT and dupe the customers into signing contracts with Alder’s competing service.

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“We urge consumers to be on the lookout and report suspicious activity during the summer when we see an increase in fraudulent activity,” says Smail.

ADT has an online resource about sales scams in the security industry and tips to prevent falling for them that can be viewed here.

NorthStar provided CE Pro sister publication Security Sales & Integration with the following response:

This settlement resolves nearly four years of litigation between the companies involving historical deceptive sales allegations against one another. NorthStar provided evidence from nearly 100 of its customers stating they were victims of deceptive sales tactics by ADT. The settlement allows NorthStar to move forward and continue to offer superior service to our nationwide customer base.

NorthStar continues its commitment to eliminating deception from the industry, and is pursuing litigation against other companies that engage in deception and victimize its customers. NorthStar prides itself on ensuring the highest internal standards of compliance and business ethics, and protecting its customers from illegal conduct.

This article originally appeared on our sister publication Security Sales & Integration's website. 



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Comments

Posted by LeeSSG on July 18, 2019

While ADT and Northstar (and the dozen others) are bullying each other in the same sandbox, distracting the attention of investors, law enforcement and municipalities are legislating against the entire private alarm industry that is causing long term industrywide customer attrition, much more damage than several aggressive competitors, and changing the landscape going forward.  The issue for decades has been UPR/ Unnescessary Police Response, aka False Alarms. Leadership of alarm suppliers, like ADT and Monitronics, have been promoting on-demand police response to their calls for help, while nearly all are error/false alarms, consuming up 18% of police budgets.  Millions of deterrent alarm customers are led to believe law enforcement is their silent partner, when not true.  We now know false alarms add value to alarm suppliers…. which explains how a basic technology problem remains unsolved for many decades.
Note: ASCMA/Monitronics has filed Chapter 11 BK, and was delisted this month… blaming high debt, rather than high customer/revenue attrition.
Source: Lee Jones; Support Services Group

Posted by LeeSSG on July 18, 2019

While ADT and Northstar (and the dozen others) are bullying each other in the same sandbox, distracting the attention of investors, law enforcement and municipalities are legislating against the entire private alarm industry that is causing long term industrywide customer attrition, much more damage than several aggressive competitors, and changing the landscape going forward.  The issue for decades has been UPR/ Unnescessary Police Response, aka False Alarms. Leadership of alarm suppliers, like ADT and Monitronics, have been promoting on-demand police response to their calls for help, while nearly all are error/false alarms, consuming up 18% of police budgets.  Millions of deterrent alarm customers are led to believe law enforcement is their silent partner, when not true.  We now know false alarms add value to alarm suppliers…. which explains how a basic technology problem remains unsolved for many decades.
Note: ASCMA/Monitronics has filed Chapter 11 BK, and was delisted this month… blaming high debt, rather than high customer/revenue attrition.
Source: Lee Jones; Support Services Group