Monday, July 1, 2013
Help Me Howard: Alarm Contract
A house alarm is a wonderful thing to have, but some people will tell be careful when you try to cancel because many of those contract renew automatically. And some people have no idea. Is it legal to automatically renew a customer? It's why one man called Help me Howard with Patrick Fraser
Bob Pastorello: "So we decided it was a good idea to have an alarm system."
That was in 2005, eight years later, they decided they wanted to upgrade their alarm system.
Bob Pastorello: "And if you noticed, we have large sliding glass windows plus the entry doors. So I wanted to have a glass break alarm."
After looking at what the various alarm companies could offer, they decided to go with a different company.
Bob Pastorello: "And the new company we were looking at had a wireless glass break alarm and a camera, and as well as remote entry, which is kind of nice too."
They signed up with the new company. Then called the old alarm company to say, sorry but we are canceling.
Bob Pastorello: "He proceeded to tell me that we have a five-year contract."
Bob thought no problem, he had been with them for right years so the contract had expired but ...
Bob Pastorello: "He said, 'No. No there's a clause that says it renews for five years, every 5 years.'"
Bob says the company representative said, if you wanted to cancel after five years, you had to notify us. Bob didn't know that and to cancel now.
Bob Pastorello: "And he says, well you're gonna owe us, and he rattled off and did some calculating, he said $842 to leave us."
In other words, Bob had to pay off the years left on the contract. Bob is a smart fellow so he quickly responded.
Bob Pastorello: "I said but I would like to see my name on a contract that states that. And he says, 'Oh we'll, get it to you right away.'"
The company hasn't sent Bob a copy of the contract that says it renews every five years if you don't cancel that he allegedly signed, and bob doesn't think they will find it.
Bob Pastorello: "You know, I doubt it because I think I would've kept a copy of it."
And his feeling about being forced to pay for an alarm that automatically renews for five years if you don't cancel the contract.
Bob Pastorello: "Well, I thought that was absurd."
Well Howard, Bob thinks its absurd but do you think its legal?
Howard Finkelstein: "When Bob started using the alarm company it was legal to automatically renew a contract, but because so many businesses took advantage of customers, in 2010 the legislature changed the law. It now requires the business to notify the customer that the contract is up for renewal and they have the right to cancel it."
The original alarm company that Bob signed with had been bought out by another company. They told us they do not have a copy of his original contract. They told us they email customers to give them the option to opt out of the contract.
They said since they had acquired Bob's account from another company his email address may have gotten lost in the transaction, and that may explain why he didn't get the cancellation notice. They then apologized and allowed him to cancel the contract and not have to pay the $800.
Howard Finkelstein: "When you have a service contract you need to keep it in a safe place. If you cant find the contract, ask the company to send you a copy. And by the way, if they don't notify you that the contract is up for renewal, you can get out of it."
Bob got out of the old contract without paying and now wonders if he was paying for nothing for awhile.
Bob Pastorello: "And she said you know its funny when we disconnected the old system, no body ever called us. The alarm must not have activated."
Patrick Fraser: "If you are going to sign up with an alarm company, they have to notify you by mail or email when its up for renewal. But tell them you dont want that clause in the contract. Tell them if they want to renew it, they have to call and talk to you. And if they dont want to do that, there are plenty more companies under the label ... alarm."
Alarming situation left your ears ringing? Need to alert someone? That's us. We may not be wired perfectly, but we do have a connection. Howard has a lawbook.
501.165 Automatic renewal of service contracts.-
(1) DEFINITIONS.-As used in this section:
(a) “Automatic renewal provision” means a provision under which a service contract is renewed for a specified period of more than 1 month if the renewal causes the service contract to be in effect more than 6 months after the day of the initiation of the service contract. Such renewal is effective unless the consumer gives notice to the seller of the consumer’s intention to terminate the service contract.
(b) “Consumer” means an individual, as defined in s. 501.603 receiving service, maintenance, or repair under a service contract. The term does not include an individual engaged in business or employed by or otherwise acting on behalf of a governmental entity if the individual enters into the service contract as part of or ancillary to the individual’s business activities or on behalf of the business or governmental entity.
(c) “Seller” means any person, firm, partnership, association, or corporation engaged in commerce that sells, leases, or offers to sell or lease any service to a consumer pursuant to a service contract.
(d) “Service contract” means a written contract for the performance of services over a fixed period of time or for a specified duration.
(2) SERVICE CONTRACTS WITH AUTOMATIC RENEWAL PROVISIONS.-
(a) Any seller that sells, leases, or offers to sell or lease any service to a consumer pursuant to a service contract that has an automatic renewal provision, unless the consumer cancels that contract, shall disclose the automatic renewal provision clearly and conspicuously in the contract or contract offer.
(b) Any seller that sells or offers to sell any service to a consumer pursuant to a service contract the term of which is a specified period of 12 months or more and that automatically renews for a specified period of more than 1 month, unless the consumer cancels the contract, shall provide the consumer with written or electronic notification of the automatic renewal provision. Notification shall be provided to the consumer no less than 30 days or no more than 60 days before the cancellation deadline pursuant to the automatic renewal provision. Such notification shall disclose clearly and conspicuously:
1. That unless the consumer cancels the contract the contract will automatically renew.
2. Methods by which the consumer may obtain details of the automatic renewal provision and cancellation procedure, whether by contacting the seller at a specified telephone number or address, by referring to the contract, or by any other method.
(c) A seller that fails to comply with the requirements of this subsection is in violation of this subsection unless the seller demonstrates that:
1. As part of the seller’s routine business practice, the seller has established and implemented written procedures to comply with this section and enforces compliance with the procedures;
2. Any failure to comply with this subsection is the result of error; and
3. As part of the seller’s routine business practice, where an error has caused the failure to comply with this subsection, the unearned portion of the contract subject to the automatic renewal provision is refunded as of the date on which the seller is notified of the error.
(d) This subsection does not apply to:
1. A financial institution as defined in s. 655.005 or any depository institution as defined in 12 U.S.C. s. 1813(c)(2).
2. A foreign bank maintaining a branch or agency licensed under the laws of any state of the United States.
3. Any subsidiary or affiliate of an entity described in subparagraph 1. or subparagraph 2.
4. A health studio as defined in s. 501.0125
5. Any entity licensed under chapter 624, chapter 627, chapter 634, chapter 636, or chapter 641.
6. Any electric utility as defined in s. 366.02
7. Any private company as defined in s. 180.05 providing services described in chapter 180 which is competing against a governmental entity or has a governmental entity providing billing services on its behalf.
(e) A violation of this subsection renders the automatic renewal provision void and unenforceable.
History.-s. 1, ch. 2010-58; s. 39, ch. 2011-194.
Contact Help Me Howard:
E-mail: email@example.com (please include your contact phone number when e-mailing)
Reporter: Patrick Fraser at firstname.lastname@example.org