Deceptive Sales Practices

Established in 1948, the Electronic Security Association (ESA) represents, promotes and enhances the growth and professional development of the electronic life safety, security, and integrated systems industry. As the voice of the collective industry at all levels of government, ESA actively supports legislation and regulations that enhance public safety.

Issue Overview

While most businesses and individuals selling alarm systems are legitimate, some use deceptive practices as a core component of their sales practices.  These salespeople often target the elderly and customers posting lawn signs at their homes. Consumer complaints have historically been highest during the summer months and in areas with warm climates.

Consumer Harm

Commonly reported deceptive tactics include claims that the customer’s current alarm company is going out of business or that an upgrade to their home security equipment is required. In some cases, the salespeople falsely state or imply they represent the consumer’s current company. Once inside the home, these salespeople quickly transfer the customer to a new provider under false pretenses, sign them to a new contract and, in some cases, remove the existing equipment from the home.  It is only later that the victim learns that they have been deceived, and are now trapped; signed to two contracts with two different security providers. They can face termination fees if they elect to cancel one of the contracts and may also be charged for the discarded equipment.

Despite the widespread occurrence of deceptive sales practices, it is believed that only a fraction of those harmed file a complaint. According to the U.S. Department of Justice, fraud victims “often suffer their losses alone and in silence. Shame, guilt, embarrassment, and disbelief are among the reasons that only an estimated 15 percent of the nation’s fraud victims report their crimes to law enforcement. Other reasons include victims’ doubt about their own judgment, a sense of betrayal, and fears about how their family members, friends, and business associates will react.”

Proposed Deterrents

The ESA strongly supports enforcement of consumer protection laws to curb deceptive sales practices.  More specifically, we advocate a multi-part strategy, including consumer education; advocacy efforts by industry members, state trade associations and the BBB; stricter enforcement of current laws on the part of law enforcement; and information sharing / coordination between law enforcement and state attorneys general across jurisdictions to curtail this national challenge.

ESA’s Commitment to Ethical Selling Practices

The ESA developed the Electronic Security Association’s Code of Ethics and Standards of Conduct, available on our website, to provide guidance for members in the ethical conduct of business. ESA expects its Members to meet or exceed the guidelines set forth in this Code.  In fact, failure to comply with this Code may result in disciplinary action, including but not limited to termination of ESA membership.  Members are encouraged to implement policies and procedures that provide the highest standards of quality and consumer protections.