Markets Wired

The Federal Trade Commission is offering information to help homeowners avoid unscrupulous sales agents who go door-to-door during the summer months. These scammers use deceptive, high-pressure tactics to get people to buy expensive, and sometimes substandard, home security systems they often don’t need.

The FTC advises consumers to ask for identification before allowing a salesperson to enter their home – some states require door-to-door salespeople to state up-front their name, the company’s name, and what they’re selling; others require them to show a sales license and photo ID. The agency also advises consumers to watch for these signs of a scam:

• Pressure to act now to take advantage of a limited time offer.
• Offers of “free” equipment to get you to sign a contract. Translation: you may have to sign a long-term and expensive system monitoring contract.
• Scare tactics – “Burglaries have occurred in your neighborhood.”
• Phony upgrades – They say they have come to replace your security system, but they really want to install a new system with a costly contract for a monitoring service.
• “Your security company is out of business.” – If they say this, call your company to confirm.

The FTC also advises that, whether sellers come to your door or you seek them out, ask for the contractor’s name, address, and phone and license numbers; what state issued the license; and the name the license is filed under. Check out the company online and with your state Attorney General, local consumer protection agency, Better Business Bureau, and state licensing officials. The FTC also advises:

• Get references and find out how the equipment and services have performed for others.
• Get written estimates from several companies and ask questions about who will install the system and how it will function. Be sure you know who will monitor the system, how much it will cost, and how often you will be billed.
• Read the fine print. Make sure the written contract includes all oral promises made by the salesperson.
• Ask your police and fire departments if you need to register your system, and if there are fines for responding to false alarms.
• You can cancel the deal. The FTC’s Cooling-Off Rule gives you three business days to cancel if you sign a contract in your home or anywhere that is not the seller’s permanent place of business – even if the system has already been installed. You don’t have to give a reason for canceling.

For more information, see the FTC’s Knock, Knock. Who’s There?Want to Buy a Home Security System? Beware of home alarm sales scams.