The Alarm Professor The Alarm Professor

Alarm Monitoring Industry's Dirty Little Secret #1

Today I’m going to talk with you about monitoring, the cost of alarm systems, and what we'll call the dirty little secret. In fact, it's only the first dirty little secret, and I'll reveal the second in my next installment! 

The monitoring industry has been taking advantage of homeowners and reaping incredible profits from home security monitoring plans. I'll tell you exactly what that first dirty little secret is in a moment. First, a little back story.


I started putting alarms in in 1969 before there were monitored alarms as far as residential goes. If you wanted to monitor your alarm, you had to run special circuits from the phone company, wiring directly to the central station. So, as you can guess, that was quite an expensive proposition! As a result, very, very few people had monitored alarm systems.

At that point in time, it was a very fragmented industry. ADT was the one big, huge company, and everyone else was kind of a mom and pop industry.

As time went on in the late '70s, we started getting digital dialers so that we could actually use the customer's phone line to send a signal to a monitoring station or just a tape dialer to different peoples homes.

The alarm companies made some money on the installation. They made money on service. They made a little bit of money on this alarm monitoring.

In the 1980's, Brinks Armored Car got into the alarm business. They changed the model.

Brinks started putting in alarm systems below cost, in some cases free, and then charging a higher fee for the monitoring to recoup their costs. Whereas a typical company that charged for the alarm equipment might charge $15 a month or $16 a month, Brinks would come in at $29.95 a month for home alarm monitoring.

They would get an extra $13 or $14 a month, and they would pay the extra fee initially to cover the cost of the installation. But it didn't stop there. They found a gold mine that homeowners would be sucked into paying.

As time went on, companies started buying companies just for the monitoring. The profits were massive.

You would get big companies like ADT, Monitronics and the like. They started changing the paradigm. They started educating everybody that alarm systems were really cheap and monitoring was really expensive, when the fact of the matter is, it's just the opposite. Monitoring is very inexpensive to do, and alarm systems are not cheap.

What we have today is, we have alarm companies charging $35 to $60 a month for subsidizing $500-700 in alarm equipment. But you are stuck in a contract and pay that same fee for as long as you have monitoring.

Sometimes they're getting $30 to $40 a month markup to cover $500 or $600 of equipmrnt in the initial home alarm system. Over the course of 3 or 4 years it's literally like the payday loan sharking business. Homeowners are being scalped and the monitoring companies are raking in huge profits.

And what if you already have equipment in your home, or have been paying for years the padded prices of the monitoring company? Your equipment has been long, long paid off.

That’s a major reason we created our own Blockwatch Alarm home monitoring solution, it trims out the fat while giving you a better, more transparent service. (the other major reason is revealed next!)

Next, I’ll reveal the other dirty little secret of the alarm monitoring industry. It will make you wonder why you have your alarm system monitored at all! And it’s the other reason the industry is ready for a complete paradigm shift.

05-May-2014
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