Pennsylvania Attorney General Tom Corbett says a York County business will refund consumers, pay fines and change its sales campaigns and contracts following claims that it deceptively marketed and sold electronic in-home burglar, fire and medic alarm monitoring systems to the elderly and/or disabled.
Corbett said the Bureau of Consumer Protection reached an "Assurance of Voluntary Compliance" agreement with Crime Intervention Alarm Co. The civil legal action resolves alleged violations of Pennsylvania's Consumer Protection Law, Telemarketer Registration Act and the Plain Language Consumer Contract Act.
According to investigators, Crime Intervention Alarm Company entered into contracts with consumers for the sale and installation of electronic residential security monitoring equipment and services designed to alert authorities during a medical, fire or police emergency.
Agents said the company uses the Yellow Pages, the Internet and telemarketing campaigns to advertise and promote its products and services to mostly older and/or disabled consumers who live independently. Some of the ads offer potential customers, "VETERAN AND SENIOR CITIZEN DISCOUNTS."
According to the agreement, consumers interested in the alarm monitoring services were required to sign a five-year contract. Several buyers complained that certain terms were too small to read and that the contracts failed to clearly and conspicuously disclose that:
• The service agreements had a built-in or automatic five year renewal clause.
• The prices may increase as much as 10 percent per year for each year of the five year sign-up period.
In addition, several consumers who were contacted at their homes to buy the products and services claimed that they failed to receive their three day right to cancel notification as required by state law.
"Inadequately disclosed renewals, unfair price increase language and no notification of cancellation rights are not acceptable business practices," Corbett said. "Any attempt to bury or omit these types of terms and conditions is deceptive and illegal. Our agreement resolves these issues offering better protections to those who do business with the company in the future."
Corbett said in addition, the company will allow consumers to void the contract due to death, relocation to an assisted living, hospital or nursing home facility, or if a live-in health care worker moves into the residence.
The agreement also claims that more than a dozen consumers complained that they were illegally contacted by the company on their home phones even though they were officially enrolled on Pennsylvania's "Do Not Call" list.
Additionally, Crime Intervention Alarm Company is accused of including the trademarked Better Business Bureau (BBB) torch logo on its website, implying that it is a member of the BBB, presumably in good standing. In reality, the company is not a member and has an unsatisfactory record with the organization.
Under the terms of the agreement, the company admits no wrongdoing and is required to:
• Pay restitution to eligible consumers who file a complaint with the Attorney General's Office before July 16, 2006.
• Pay $13,000 in civil penalties and costs.
• Change its contract language, format and business practices to be in compliance with Pennsylvania's Consumer Protection Law, Telemarketing Registration Act and Plain Language Consumer Contract Act.