Alarm company agrees to settlement in Milwaukee County court

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The Milwaukee County Circuit Court entered a consent judgment Sept. 12 by which the Utah alarm service company Vivint Inc., agreed to pay up to $148,000 in refunds to consumers who had been misled regarding their ability to cancel their alarm service contracts.

Vivint also agreed to remove affected consumers from collections and cancel more than $450,000 in consumer debt. Additionally, Vivint is to pay attorney fees and forfeitures to the state of Wisconsin totaling $65,000 and improve disclosures to consumers about services and charges and make it easier for consumers to cancel their contracts.

The Better Business Bureau website lists Vivint, previously named APX Alarm Security Solutions Inc., as having a total of 1,493 closed complaints in the past three years.

According to a news release from the Department of Justice, the Wisconsin Department of Agriculture, Trade and Consumer Protection initiated an investigation of Vivint after receiving complaints about the company’s door-to-door sales practices. Vivint customers had complained “they were induced to sign up with Vivint based on misrepresentations during the sale presentations, such as an offer for free installation of alarm equipment was a limited time offer that need to be taken advantage of immediately.”

The state of Wisconsin, on behalf of the Wisconsin Department of Justice, the Wisconsin Department of Agriculture, Trade and Consumer Protection and the Wisconsin Department of Financial Institutions, filed a complaint against Vivint in Milwaukee County Circuit Court on Sept. 7.

The complaint brought 13 counts against Vivint, including fraudulent misrepresentations (Wis. Stat. § 100.18); disclosure prior to sale – door-to-door sales (Wis. Stat. § 100.20 and Wis. Admin. Code § ATCP 127.64); misrepresentation – door-to-door sales (Wis. Stat. § 100.20 and Wis. Admin. Code § ATCP 127.72(4)); failure to disclose credit terms (Wis. Stat. § 422.301 and § 422.202); unlawful default policy (Wis. Stat. §§ 425.103, 425.104 and 425.105); unlawful exclusion of oral representations from agreement (Wis. Stat. § 421.301); failure to register (Wis. Stat. § 426.201); misrepresentations – door-to-door sales (Wis. Stat. § 100.20 and Wis. Admin. Code § ATCP 127.72(6)); misrepresentations – door-to-door sales (Wis. Stat. § 100.20 and Wis. Admin. Code § ATCP 127.72(11)); misrepresentations – door-to-door sales (Wis. Stat. § 100.20 and Wis. Admin. Code § ATCP 127.72(15)); telephone solicitations (Wis. Stat. § 100.20 and Wis. Admin. Code § ATCP 127.81); no-call violations (Wis. Admin. Code § ATCP 127.82 and Wis. Sat. § 100.52); and unfair billing (Wis. Stat. § 100.195).

Among other things, the plaintiffs alleged Vivint encouraged customers to purchase its security system by claiming there had been significant criminal activity in the customer’s neighborhood, though such claims were exaggerated or false. Vivint also allegedly failed to disclose that alarm activations would be routed to a private first responder service, Securita, and there was a charge of $60 per alarm activation to which Securita responded, in addition to the monthly service charge.

The plaintiffs’ prayer for relief sought penalties and forfeitures pursuant to the applicable statutes and further equitable relief.

The parties reached a settlement agreement and the court entered a consent judgment Sept. 12. Vivint expressly denied any wrongdoing in the parties’ stipulation for consent judgment.

Vivint did not respond to requests for comment. The company’s attorney, Gregory Everts, of Quarles & Brady LLP, declined to comment on the case.