A Brief Industry History: There are currently over 20,000,000 alarm monitoring customers in the U.S. For the last twenty years the industry has been structured such that the “monitoring” revenue subsidizes the non-monitoring operations of the Alarm Company. This was a necessary part of maintaining a more predictable cash flow for the Alarm Company. With the entry of large investment companies into the alarm industry monitoring rates were increased dramatically to subsidize installation of new alarm systems. There is nothing wrong with this practice and it served to expand the markets of the alarm industry dramatically.
At the same time that the large companies were increasing the size of the industry the smaller companies were struggling to compete with the lower installation prices from subsidized systems. The number of companies shrank from 15,000 to 5,000. Now all the small companies were much more reliant on the increased ‘monitoring’ rates to subsidize their falling sales.
If you are currently monitored and you want to reduce your costs it is important to look carefully at your present monitoring agreement. As indicated above, the monitoring agreements at their high rates are very important to these companies and they are not about to do anything voluntarily to assist you in leaving them as a monitored customer. I do not encourage or support any effort to breach or break a contract between you and your alarm company. I do encourage you to understand the terms and your rights under any contract.Look for the following information in your monitoring agreement:
- Term of agreement: What is the expiration date of the agreement? --
- Notification for termination: How much notice is required before the end of the agreement in order for the agreement to not automatically renew? Does the contract provide for canceling the service?
- Penalty for termination: If you cancel your service before the end of the contract period is there a penalty? What is it?
- Ownership of Equipment: Who owns the equipment? Will the Alarm Company remove the equipment? If the monitoring agreement doesn’t stipulate who owns the equipment, you own it.
If you don’t have an alarm agreement write to the Alarm Company and give them a thirty day notice of your wish to cancel their service. State in the letter that you will consider the cancellation accepted if you receive no written response by the end of the thirty days. Send your letter return receipt requested so that you have proof they received your correspondence. (Document all correspondence and actions you take). Ask them to put any explanations or clarifications in writing. If they indicate that you have a contract that requires more of you, have them send you a copy of that contract with an explanation of the requirements. Always write your letters in such a manner that if they fail to respond they are agreeing with your position. Also make sure that you always give them a deadline date for a response.
If you feel you need assistance in communicating with your alarm company or alarm monitoring provider, feel free to give contact us for assistance.
There is nothing to be gained by alienating your present alarm company, but as the customer you certainly have the right to question them and receive information that is pertinent to your alarm service and monitoring agreement.