AlarmForce Admits to Wrongfully Charging Monitoring Fees After Subscription Cancellations

AlarmForce said its policy review resulted from due diligence undertaken during a potential sale process.

By Rodney Bosch · August 24, 2016

Retroactive to Aug. 1, 2013, residential customers who have been incorrectly charged monitoring fees subsequent to the cancellation date will receive a refund of those charges, plus interest, the company announced in a news release. AlarmForce said it is considering its cancellation and other practices relating to existing residential customer contracts in all jurisdictions.

The company said its review, in part, resulted from due diligence undertaken during a potential sale process. During the course of the review, the company’s cancellation practice was raised as an issue. With the assistance of outside advisors, AlarmForce determined that immediate action was required to change the practice to resolve the issue.

AlarmForce also announced that as a result of this change in practice, it is undertaking a detailed examination of its revenue recognition policies for the periods starting fiscal Q4 2013 for revenue generated from customer contracts after a customer had requested cancellation of services. Where legislation governing consumer agreements prohibit charges made after cancellation notices, the company’s preliminary conclusion is that the cancelled subscription revenue should not have been recognized.

AlarmForce said it may need to restate reported revenue for some or all such previously reported financial results in relation to charges previously recognized from cancelled customer agreements where the company’s practice did not comply with such legislation.

Due to the scope and work involved in this review, the company does not expect it will have completed the necessary work to assess any required restatement and for the reporting of its quarterly financial results by Sept. 14. The company said it will provide timely updates as to the expected date of reporting of its financial results.

AlarmForce said it has been reassessed by tax authorities for the State of Florida in relation to the company’s classification of installers as independent contractors. The Florida tax authorities have taken the position that the company’s contract installers should have been classified as employees.

The company is currently subject to two upcoming audits —  an IRS Employment Tax Examination for 2014, and an audit under the Employer Health Tax Act in Ontario, Canada, commencing in September. Consequently, the company is considering possible employee tax liabilities in connection with the classification of its independent contractors and is currently evaluating the impact of whether this possible liability affects Q3 2016 or prior periods.

The company said it is considering how it will address classification of installers. A decision to convert installation personnel into employees will increase operating costs.

 

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Smart Electrical Socket Could Be Exploited to Hack Email

A vulnerability in a popular brand of smart electrical sockets has been found that could allow hackers to spread malicious software to connected devices.

Researchers have discovered that attackers could take advantage of a feature that allows the undisclosed smart electrical socket to send emails to the user every time it switches on and off.

By Rodney Bosch · August 19, 2016

BUCHAREST, Romania— A smart electrical socket that could allow a hacker to turn power outlets into botnets, read your email, and even set your house on fire if you connect an appliance that could overheat? Those nightmarish scenarios are all possible, according to security researchers.

Researchers at cybersecurity software firm Bitdefender, based here, have identified a vulnerability in an undisclosed popular brand of smart electrical socket they say could be hijacked by an attacker, reportsmotherboard.vice.com.

The vulnerable socket plugs into a regular one, and allows users to schedule the activity of any dumb electronic device, with the help of a smartphone. The app is available for both iOS and Android platforms, and there have been over 10,000 downloads from Google Play alone, according to the article. Bitdefender contacted the smart socket vendor, which has said they will release a fix during Q3 2016.

Among the most destructive actions someone could perform is to wipe the existing software on the socket and to replace it with malicious one, researchers said.

“Up until now most IoT vulnerabilities could be exploited only in the proximity of the smart home they were serving, however, this flaw allows hackers to control devices over the Internet,” Alexandru Balan, chief security researcher at Bitdefender, told Motherboard. “This is a serious vulnerability, we could see botnets made up of these power outlets.”

Researchers who analyzed the power outlet have found several security issues, including a weak username and password combination that users are not alerted to change. Experts have also noticed that, during configuration, the app sends WiFi credentials in clear text over the network.

In addition, when the device communicates with the app, the information passes through the vendor’s servers unencrypted. It’s only encoded, a process that’s easily reverse engineered.

Researchers have also discovered that attackers could take advantage of a feature that allows the device to send emails to the user every time it switches on and off.

Bitdefender outlines two possible attacks, which the company tested in an environment similar to the common home. The article continues:

They say hackers can compromise the email account of the user, if two-factor authentication is disabled. Attackers have to know the MAC address of the device and the default password. With that, they can reschedule the smart socket, or access all the information the device come into contact with, including email credentials.

Another hack that can be performed requires a little bit of coding. When typing a password, the “;” symbol can be misinterpreted as the end of a command. Someone might use this to their advantage, and instead of typing a password, they might type instructions for the device to perform a malicious action. Usernames and passwords should be stripped of characters such as commas or semicolons, in order to prevent command injections.

“When an attacker exploits this flaw, the commands specified in the new password overwrite the root password and can open the embedded Telnet service. Using Telnet, an attacker, regardless of his location, can send commands to stop/start/schedule the device, as well as to execute rogue commands, including running malicious firmware to achieve persistence or using the device to perform attacks on other computers or devices inside the local network,” Bitdefender said in a paper.

The consequences for users can can extend to losing control of all their network-connected devices as they become weapons of attack in a cyber-criminal network, as well as to exposing their email accounts and their contents, security researcher George Cabau told Motherboard.

 

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DIY Systems Provider Goes Too Far in Ad Attacking Electronic Security Industry

Boston-based SimpliSafe attacked the home security industry, painting alarm companies as enemies looking to take advantage of customers.

SimpliSafe is a hybrid residential and small business security systems provider that sells DIY kits.

By Scott Goldfine · August 4, 2016

 

I’m mad as hell and I’m not going to take it anymore!

That’s how I feel after coming across an inflammatory ad seeking to discredit the entire security alarm industry.

The offending company first drew my attention last year with testimonial-oriented TV ads highlighting its offering was different from traditional alarm systems. The ante (and my pulse) was raised when I began to hear radio and podcast ads more openly critical of the “traditional” alarm industry.

However, the recent print magazine campaign I encountered is, in my opinion, an all-out declaration of war on our industry and as such has my blood boiling.

The egregious and antagonistic act was inflicted by SimpliSafe, a Boston-headquartered hybrid residential and small business security systems provider that sells prepackaged self-installed (DIY) kits online, with alarm monitoring principally handled by Roselle, N.J.-based AMCEST’s wholesale central station ($14.99/month to customers).

Having grown to more than 250 employees and a claimed 500,000+ customers, SimpliSafe’s aggressive marketing has been fueled by funding from investors such as Sequoia Capital’s $57 million infusion in 2014. Founded by Ivy League graduate and current CEO Chad Laurans, the company presently offers some 10 wireless home and light commercial packages priced from the $229.96 “Starter” set to the $539.85 “Ultimate” option.


RelatedSimpliSafe DIY Home Security System ‘Inherently Insecure’ and Prone to Hacking, Report Finds

 

The giant incendiary headline reads: “There is something TERRIBLY WRONG with the Home Security Industry.”

The body copy includes these assertions: “Most alarm companies take advantage of people who want to feel safe. They offer you a ‘free’ outdated alarm, but then require you to sign a long-term contract full of nasty fine print. It’s pretty sickening really. Our founder, a Harvard engineer, studied the alarm industry and found all kinds of problems with it.”

During my nearly two decades in this business, I have seen many newcomers to the electronic security field deploying all kinds of strategies and making lots of claims. But never have I witnessed — particularly on such a large, nationwide scale — the brazen bashing and venom spewing now being aimed at our great, proud and proven industry by this bile-pedaling excuse for a security company.

It’s more than hitting below the belt; it is an affront to everything for which we stand. Further, it undermines the well-deserved and hard-earned faith and trust we have instilled among the public.

It’s bad enough our industry has had to contend with losing customers to deceptive sales practices and get bombarded with rampant news reports of consumers being victimized by alarm company scams. We all know, and to their credit some of our trade associations’ high-profile companies have stepped forward to publicize the fact that those cases are a few bad apples and low-end bottom feeders that are not truly representative of the industry overall (media sensationalism also plays a role).

It’s more than hitting below the belt; it is an affront to everything for which we stand. Further, it undermines the well-deserved and hard-earned faith and trust we have instilled among the public.

The closest parallel I can draw to SimpliSafe’s negative campaign is the alarm industry’s conflict with law enforcement regarding false alarms, and the few highly vocal detractors who pushed for nonresponse and excessive penalties. Thanks to better equipment and practices, along with vigilance from organizations like the Security Industry Alarm Coalition (SIAC), false alarms have been reduced and relationships with first responders much improved. However, we had all better brace for a false alarms surge in the near future due to self-installed devices such as those sold by SimpliSafe.

No matter what anyone alleges, there is no substitute for a custom-tailored, professionally installed security system.

That issue is among several — not the least of which are misleading declarations and reports of system hacking vulnerabilities (sources tell me there have also been licensing snafus) — that tell me SimpliSafe ought not be throwing stones from its glass house. An outfit like that can’t touch the high skill and expertise, superior equipment, wider choice of products and services, and premium customer service, full-service operators in our business deliver on a daily basis.

DIY has its place in the market but there is no room for desperate, baseless ploys that soil the good name of our industry and its thousands of upstanding professionals.

However, just doing a good job is not enough. From grassroots to mass media, security firms and groups must actively promote the industry’s virtues and help ensure the public is exposed to balanced and truthful information.

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Smart Home Market to Exceed $60B by 2021, Forecast Suggests

North America dominated the market in 2015. More awareness of energy savings as a result of smart home technology is one of the factors for the anticipated growth.

By SSI Staff · June 29, 2016

The global smart home market is expected to surpass $60 billion by 2021, according to a forecast by Research and Markets.

Increasing awareness of energy saving among customers, surging demand for real-time home security and growing technological advancements are anticipated to boost the global smart home market during the forecast period. In addition, backed by the expanding Internet of Things (IoT) market, booming M2M communication market and thriving touch-free intuitive gesture control market, the market is expected to register a healthy growth rate over the next five years.

North America dominated the smart home market in 2015, followed by Europe, Asia-Pacific, Middle East & Africa, and South America

“A smart home refers to a residence equipped with computing and information technology devices, which anticipates and responds to the needs of the owner in an efficient and effective manner. In a smart home, the owner can easily monitor and control a wide range of applications such as lighting control, access control, fire detection, leak detection, energy efficiency, etc. from anywhere via his/her smartphones or internet. Smart homes also use key cards or fingerprint identification in place of conventional locks, making it harder for someone to break-in.”

 

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Washington, D.C. Offering Rebates Up to $750 for Installing, Registering Surveillance Cameras

Businesses and residents can register their security cameras through paperwork and receive a rebate check in the mail weeks later.

One D.C. resident called the rebate program “a great idea.

WASHINGTON, D.C. — Residents and business owners here have been given quite an incentive to purchase video surveillance cameras. A new program in Washington, D.C. will provide rebates to home and business owners to help them purchase the cameras in exchange for registering the cameras with the District.

Residents can earn rebates up to $500 and businesses up to $750, according to an NBC Washington report.

“It’s almost impossible to commit a crime these days and not be caught on somebody’s video,” says Police Chief Cathy Lanier.

Feedback on the program has been positive, according to the report. All that is required is to fill out paperwork describing the camera that has been installed, D.C. workers come to check out the cameras and then a check arrives in the mail a few weeks later.

Wanda Hawkins, a resident of the nation’s capital, used the program to improve security around her home and earned a $500 rebate in the process.

“It’s a great idea, a great idea,” Hawkins says. “A couple of my other neighbors are looking into it as well.”

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ESA, MSCA Respond to Massachusetts Attorney General’s Ruling on Comcast Security Installations

By SSI Staff · December 11, 2015

The Electronic Security Association (ESA) and Massachusetts Systems Contractors Association (MSCA) issued responses to the Massachusetts Attorney General’s ruling on Wednesday ruling that states Comcast does not need a license or permit for its security work.

Both the MSCA and ESA disagree with the ruling.

ESA President Marshall Marinace issued the following statement on Friday: “We are aware of this. ESA is an advocate for licensing. Licensing encourages a high level of professionalism and continuing education for industry owners and employees; licensing protects consumers from unethical and perhaps criminal elements abusing citizens’ trust in gaining access to homes and businesses.

“In addition, provisions in licensing laws often assist the law enforcement and fire prevention community,” Marinace’s statement continues. “ESA supports efforts at the state level to work with state regulators and legislators and other industries to support passage of state licensing legislation to protect the business and professionalism of our industry.

The majority of our members install wireless systems. Many of our members that install similar security systems and technology are also in favor of licensing for many of the reasons above and to elevate the professional standard within our industry.

“ESA is concerned with the precedent that this ruling sets as the majority of our members install wireless systems,” the statement continues. “Many of our members that install similar security systems and technology are also in favor of licensing for many of the reasons above and to elevate the professional standard within our industry.”

The Attorney General’s ruling states Comcast’s Xfinity system “does not constitute a security system” and the company is free to operate without a license or a permit. Back in 2012, a cease and desist order was issued to Comcast in Andover, Mass.,  and Amesbury after the Electrical Board ruled in favor of two electrical inspectors. Comcast appealed the lawsuit, and the Attorney General overturned the decision on Wednesday.

The MSCA went as far as to call the ruling “shocking” in a statement released Thursday night.

“While this is the end of the Superior Court Case, it is by no means the end of the issue,” the MSCA said in a press release attributed to president Wells Sampson and legislative chair David Wescott.

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Door-to-Door Alarm Salesman Arrested for Intruding Into La. Home

 

A Fluent Home salesperson allegedly forced his way into a Louisiana home in an effort to sell a burglar a

By SSI Staff · May 20, 2015

JEFFERSON PARISH, La. — Police have arrested a Fluent Home salesperson after he allegedly forced himself into a home here while selling burglar alarms.

The homeowner told authorities that Jens Peterson, 20, arrived at her home on May 16 and cracked her door open and let himself inside the residence. Once inside, Peterson put his hands on the resident’s shoulders and began asking about her home security system, New York Daily News reports.

The woman claims that after she pointed her security system out to Peterson, he started pressing its buttons and refused a request for him to leave. The salesman finally left after someone in the living room approached him, according to the arrest report.

When police arrived on the scene, Peterson, along with two other Fluent Home employees, were inside a vehicle parked nearby the home.

The Utah-based Peterson has been charged with unauthorized entry of an inhabited dwelling and peddling with no permit.

Canadian-based Fluent Home is a summer sales model security company with offices in Provo, Utah as well as Edmonton and Vancouver, Canada.

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Vision Security Barred From Selling Service in Florida

The Utah-based security firm has settled a claim with the Florida Attorney General’s Office for allegedly misleading elderly consumers.
By SSI Staff · March 10, 2015

TALLAHASSEE, Fla. — The Florida attorney general’s office has banned Vision Security from conducting business in the state for two years as a result of misleading consumers.

In August, news station 8 On Your Side discovered that Orem, Utah-based Vision Security representatives were using deceptive sales practices to get elderly consumers to sign a contract with their firm.

Customers claim that Vision Security sales representatives pretended to work for their current security system provider, and said the reps stated they were just upgrading equipment. Some sales reps allegedly told customers that their current companies were out of business and Vision was taking over.

Reporters at the station then contacted Attorney General Pam Bondi, who promised to investigate the case, WFLA.com reports.

RELATED: ADT Accuses Vision Security of Lying to Make Sales

Bondi recently reached a settlement with Vision Security, which prohibits the firm from selling service in Florida for two years. Additionally, the door-to-door alarm sales company and must pay $18,000 to the state, as well as settle complaints with at least 40 customers who claim the company mislead them into signing up for contracts they didn’t need or want.

This isn’t the first time Vision Security has been in hot water for allegedly using deceptive sales practices.

RELATED: Door-to-Door Alarm Firm Faces Lawsuit for Misleading Ohio Consumers

ADT has filed several lawsuits against the firm, claiming that Vision Security used misleading sales tactics to dupe ADT customers.

And last July, Vision Security settled a claim with the Idaho Attorney General’s Office for misrepresenting the terms of the firm’s security system contracts.

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Police: Bogus Door-to-Door Alarm Sales Reps May Be Burglars

Police  have received reports that men are pretending to be alarm technicians to scan homes for possible burglaries.
By SSI Staff · January 14, 2015

ANDERSON, Calif. — The Anderson Police Department has warned residents to look out for individuals posing as door-to-door alarm salesmen, who are actually casing out homes for a burglary.

The department has received several calls from residents reporting suspicious activity from men claiming to represent security alarm companies, Record Searchlight reports.

In one incident, a woman reported that a man, claiming to be a representative from Hue and Cry Security showed up to her door unannounced at 7 p.m. The man claimed that he was there to evaluate her home’s security cameras.

The woman told him she was busy and to come back later, and immediately contacted police. Officials later determined that the man was not an employee of any security company and may have been a potential burglar.

Another woman in the area reported a similar incident. In her case, two men arrived at her home around 7 in the evening, claiming that they were employees of a security company and wanted to check out her alarm system. Neither man had credentials on them to prove they worked for a security company.

Police have cautioned residents to ask for a business card and identification from solicitors, and do not allow them inside. Legitimate sales representatives should also allow residents to contact the company to verify the rep’s identity.

Additionally, residents are encouraged to take note of the vehicle make, model, color and license plate when a solicitor leaves the premises.

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