The Federal Trade Commission recently issued a harsh report in conjunction with all state Attorneys General on “unscrupulous door-to-door sales agents.” The report accused these sales agents of “high-pressure or deceptive sales tactics to get potential customers to buy expensive, and sometimes substandard, systems or equipment they don’t need.”
The Better Business Bureau has already received more than 1,000 complaints about door-to-door sales scams for 2012, according to a BBB August 2 article. This is already well over half of last year’s, which totaled about 1,300 complaints.
The FTC report includes detailed descriptions of warning signs of what it refers to as a “Security System Scam.” According to the FTC, the scams’ salespeople come to the doors of residents who have the sign of a competing home security company on their lawns.
These sales agents often lie or falsely assert that the homeowner’s current company is going out of business and that the agent has been sent to replace the resident’s system. The salesperson may also claim to be from the company that the homeowner already uses and is simply there to “update” the customer’s system.
What follows, according to the FTC, is a flurry of false promises and high-pressure sales tactics. The sales agent often promises free equipment, free installation and low monitoring rates—none of which are in the final contract. The salesperson may also claim that the discounts are only available if the customer signs the contract right away, in order to ensure the customer does not have time to do any personal research.
There have even been reports to the FTC that these salespeople, who are often only employed for a summer program and are paid by the number of sales they make per day, target the elderly. One 95-year-old woman in Tennessee was tricked into paying thousands for a system she had no intention of buying, by a salesperson who refused to leave her home until she signed the contract.
One home security company Vivint, Inc., formerly known as APX Alarm, changed its name after receiving extensive customer complaints about its door-to-door sales tactics. A full investigative report was done by Memphis, Tennessee’s Action News 5 on Vivint and its door-to-door sales method.
While some companies are not blatantly unscrupulous, the lasting impact from a rushed sale can be just as devastating. Here are the top five lies that high-pressure salespeople will use when trying to close a sale.
- The security system is completely FREE.
- This offer is only available for a limited time.
- There has been recent crime in your area.
- Our equipment and installation is top-quality.
- I’m from your current home security company.
These types of practices should tip customers off to the kind of company they are dealing with. If a company feels the need to ask customers to sign on with them in a high-pressure way, it can be a good indicator that service will suffer down the line.
The Unscrupulous Lies That Will Cost You
Lie #1: “The security system and installation are completely free.”
A misleading sales tactic commonly used is to offer a “free” system and “free” installation. Although the promotion may sound like a great deal, the system is rarely high quality and costs the salesperson virtually nothing to give away. To receive this deal, the homeowner must sign an alarm monitoring contract of up to five years. The salesperson and company then make their money by overcharging on the monthly alarm monitoring service over the life of the contract. In most cases, this means thousands of dollars wasted on what was said to be a free product.
Lie #2: “This offer is only available today.”
Deceitful and unethical organizations will encourage their salespeople to close a sale by pressuring their way into a person’s home. Once inside, the salesperson will employ any means necessary to get the homeowner to sign the contract. These sellers will not take no for an answer, and some may even refuse to leave the residence until the homeowner agrees to sign a contract with the salesperson. The salesperson sometimes will also try to create urgency by claiming the deal is only available for a limited time. With this pressure, customers do not have time to thoroughly evaluate their homes’ security needs, explore different options and compare prices and products.
Lie #3: “There has been some recent crime in your area.”
Salespeople may also use scare tactics to persuade a customer into signing a contract. By inspecting the house and finding flaws, a salesperson can point out weaknesses in a home that intruders could use to break in. The salesperson may also make vague references to recent break-ins around the area, or use crime statistics and maps. By convincing customers their homes are unsecured in a dangerous neighborhood, this strategy uses fear, uncertainty and doubt to quickly close the deal. The concern and confusion caused by scare tactics potentially leads to panicked, hasty decisions, and also distracts the customer from reading the finer details of the monitoring contract.
Lie #4: “We have top-quality systems and expert installation.”
The “free” equipment given away is usually portrayed as a high quality product, and the installation done by trained professionals. However, this is rarely the case. Many homeowners have experienced unexpectedly poor equipment because the salesperson lied about the product features and agreement. The company affiliated with the salesperson does not have to claim responsibility for the sales tactics used, because in most cases, the salesperson is a contractor paid on commission and has no long-term investment in the company or the customer. Regardless, if the equipment or installation experience problems, the customer has agreed to pay continually for the monitoring service by signing the contract.
Lie #5: “I’m from your security company.”
Unexpected salespeople will often falsely claim to be from the homeowner’s security company or another company to sell systems, which is easy to determine based on home security lawn stickers and signs. Sometimes door-to-door salespeople will say the homeowner’s current security company is going out of business and they are going to replace the system. Other times they might say they have come only to update the system. However, these salespeople then install a brand new system and coerce the homeowner into signing a new contract as well. To close the sale, they will make references to police associations and even neighbors or acquaintances. These people will be unwilling or reluctant to give out personal information or identification.
Be sure to keep an eye out for these red flags when salespeople come up to your door. Not all salespeople are going to try and deceive you, but with awareness and caution, you can avoid the scam that costs homeowners up to thousands of dollars.
Protect Your Home From Door-to-Door Scams
Fortunately, there are four easy steps customers can take to make sure they are never tricked into buying anything by unscrupulous companies.
- The first step, according to the FTC, is to always demand identification from any door-to-door salesperson. Many states require sales agents to carry company identification on them, and this is an easy way to spot if they are not who they claim to be.
- Never let a salesperson into your home. Once inside, the salesperson can use high-pressure tactics and even refuse to leave. Instead, take their information and business card. Tell them you will look at it yourself and if interested, you will give them a call.
- Remember to never sign any contract without reading it thoroughly; some companies or salespeople may slip in language that costs you thousands of dollars. Be sure to check the date as well, because some companies have been accused of backdating contracts so the customer can’t cancel within the cancellation period.
- Finally, if you do find that you have been tricked by a salesperson, federal regulations give you a way out. If you sign a contract with a home security company anywhere but at that company’s place of business, you are entitled to a three-business-day “Cooling-Off Period,” during which you can cancel your contract with no repercussions or fees. This applies even if the system has already been installed.
Our Award-Winning Way of Providing Home Security
Part of LiveWatch’s role in leading the home security industry is to uphold the highest ethical and moral standards. We often refer to it as “ethics that would make our mothers proud.” A company’s ethics and morals are clear in the way its products and services are sold.
Unethical sales tactics deliberately trick customers into buying a system they may not want or need, and into paying hundreds or potentially thousands of dollars to a deceptive company.
LiveWatch offers upfront pricing, short contracts and over the phone consultations, rather than high-pressure door-to-door tactics. We respect our customers and believe they should have the time to thoroughly research and compare companies before they decide to protect with us what’s priceless to them.
In addition, LiveWatch will never lock customers into a long-term contract. We offer only one-year contracts, with monthly renewal after the contract is up. As LiveWatch sales representatives often tell our customers over the phone, “Our customers stay with us because they want to, not because they have to.”