Kevin Hunt - The Bottom Line
The Bottom Line
January 11, 2014
Sometimes it can feel like service providers must make more money through early-termination fees than by providing service.
The Bottom Line has received complaints about the substantial costs of terminating a contract with DirecTV, U-Verse, the local cable companies and cellphone service providers. Nicole Crawford discovered another early-termination sinkhole when she sold her Rocky Hill home in September and tried to transfer her ADT home-security service to the new owner.
Crawford, an ADT customer since February, was stunned when told that ADT was not, in fact, the service provider even though she called ADT to install the alarm system and the three-year contract listed ADT as the service provider. The service provider was actually the installer, Safestreets USA, which was now demanding payment for the remainder of the contract, $799.98.
Crawford reached for the emergency-alarm button. How could this happen?
Crawford says ADT had been billing her credit card each month for service. She also says when she signed the contract, she was instructed to call ADT if she had to cancel the service. During the summer, after finding a buyer for her home, she called ADT to ask about cancellation.
"The customer service person explained that I would be responsible for the contract balance unless they new owner signed a contract with ADT," she says. "At no time did they indicate I would need to contact anyone but ADT to cancel or that the new owner would need to sign a contract with anyone but ADT."
So Crawford arranged for the buyer to contact ADT and request service, assuming she would avoid the early-termination fee. ADT canceled Crawford's service but said she would also have to cancel with Safestreets.
That's when she found out her contract was with Safestreets, not ADT, and that to avoid the early-termination fee the new homeowner would have to sign a contract with Safestreets. The buyer contacted Safestreets but ultimately chose ADT, leaving Crawford with the $799.98 bill.
"Should a customer need to cancel their contract before their term expires," says ADT spokeswoman Sarah Cohn, "we will work with them on a case-by-case basis to understand their unique circumstances."
Here's the backstory Crawford said she received: When Crawford signed the contract, ADT paid Safestreets the contract amount. When she cancelled, ADT recovered the remaining amount due minus a percentage. Safestreets then billed Crawford to recover the amount taken by ADT. (The Bottom Line is almost certain a "Three Stooges" episode exists with the same plot line!)
Crawford then asked, pointedly, if SafeStreets were the actual service provider, where on the contract is the company's name? On the first page, under the authorized-dealer section, of course.
"I reviewed the section," says Crawford, "and explained that the section was blank but that ADT's logo and name was located at several spots in the contract and ADT funded the contract with Safestreets so ADT is ultimately responsible."
The cancellation form, she noted, also listed ADT's Colorado address.
That argument, and $799.98, would get her out of the contract.
When Crawford contacted The Bottom Line, she had been bounced from ADT to Safestreets and then given an ultimatum to pay the bill.
"ADT chose Safestrees as their 'authorized dealer' to install the system when I called the number listed on the ADT website," says Crawford. "I did not choose Safestreets. My intent was to do business with ADT. Ultimately, ADT is responsible for its business practices and the business practices of its authorized dealers."
ADT must have agreed.
"ADT quickly resolved Ms. Crawford's situation," says Cohn, "since our top priority is to ensure our 6.5 million customers have an excellent customer experience."
After being contacted by The Bottom Line, ADT eliminated the $799.98 charge.
"They called me and agreed that my intent was to do business with ADT directly," says Crawford. "Also, the fact that the new owner signed a contract helped."
Usually, the consumer is advised to read the fine print. In Crawford's case, it appeared ADT and Safestreets didn't read the fine print. If they had, each would have known that Crawford did not agree to a contract with anyone but ADT.
"This has been a really good lesson," says Crawford.
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