Carr: Investigation Stops Deceptive Practices Targeting the Elderly
released on October 26, 2017
found in newsletter: October 2017
ATLANTA, GA – Attorney General Chris Carr announced today that his investigation into the practices of Alarm Protection Georgia, LLC and Alder Holdings, LLC has ended in a $500,000 Judgment prohibiting the companies from future unfair and deceptive practices in connection with their door-to-door sales of alarm systems and monitoring services to Georgia consumers.
“Our investigation revealed that these companies had obtained at least 5,812 contracts from Georgia consumers, an astounding 60 percent of which were obtained from elderly and disabled consumers,” said Attorney General Chris Carr. “This case should serve as a warning for scammers looking to defraud Georgia consumers, especially our older, at-risk adults who are one of our state’s most vulnerable populations. We have their backs, and we will not tolerate this type of behavior in Georgia.”
According to the Complaint, these Utah-based alarm companies that market extensively throughout much of Georgia made false representations to induce consumers – many of whom were elderly or disabled – into entering into long-term contracts for Alder security systems by, among other things:
representing that they were employed by or partnered with a consumer’s existing security company and that they were there to “upgrade” the consumer’s service;
representing that the consumer’s existing monitoring company was no longer in business or that they were taking over for that company;
representing that the level of criminal activity in the consumer’s neighborhood had increased and that the sales representative has been referred by law enforcement officers who live in the consumer’s neighborhood and/or that police officers living in the area had recently purchased the same alarm system from the companies.
The State’s investigation revealed that these companies had obtained at least 5,812 contracts from Georgia consumers, an astounding 60% of which were obtained from elderly and disabled consumers, who tend to be more susceptible to unfair and deceptive practices. The companies’ Georgia regional sales manager was arrested in August, 2015 and subsequently indicted in February, 2017 in Laurens County, Georgia on three counts of exploitation and intimidation of an elder person. Other sales representatives posted pictures of elderly consumers on their personal social media accounts and posted comments about the consumers’ mental state.
The Complaint alleges that beginning in 2016, the companies started using electronic contracts in a further attempt to deceive consumers. According to the Complaint, consumers who were asked to sign an electronic contract were frequently handed an electronic device with only a signature page appearing. Consumers claim they were not required and/or permitted to scroll through each page of the electronic contract before consenting to execute the contract, and often did not have email addresses, computers, devices or printers that would allow them to receive, view and/or print electronic documents. These practices prevented consumers, especially elderly consumers who were not technologically adept, from fully understanding the terms of the contracts or even, in some cases, realizing that what they were signing was a contract.
The Complaint also alleges that these companies willfully and blatantly violated numerous consumer protection laws requiring door-to-door sales companies to provide consumers with copies of contracts they sign and to clearly inform consumers verbally and in writing that they have three business days to cancel the contract.
The Consent Judgment includes the following key terms:
A permanent injunction prohibiting the companies from engaging in acts and practices that violate Georgia’s Fair Business Practices Act.
A judgment against the companies in the amount of $500,000.00 for civil penalties and costs of litigation.
A requirement that the companies must provide restitution and other relief to specified consumers including reimbursement of contract payments and other fees, cancellation of contracts, forgiveness of defaulted contract balances and reversal of negative credit reporting.
a requirement that the companies must notify consumers, in writing, of automatic renewal provisions contained in contracts.
An eighteen (18) month monitoring period during which the companies must provide additional consumer remedies as directed by the State.
Consumers who have complaints regarding Alarm Protection Georgia, LLC or Alder Holdings, LLC are encouraged to file written complaints with the Consumer Protection Unit of the Attorney General’s Office by visiting www.consumer.ga.gov. Consumers also may request complaint forms by calling 404-651-8600.
Original Press Release