Pinnacle Security Group, LLC, a Utah-based home security and home monitoring company, settled their pending suit with the New York State Attorney General’s office after alleging them of violating Article 22-A of the new York State General Business Law and New York State Executive Law § 63(l2), alleging Pinnacle of unlawful sales tactics and failing to properly train and/or monitor their sales department.
Between 2008 and 2009, it was alleged that over 4000 consumers purchased Pinnacle’s home security systems and services after the company used overly aggressive and deceptive door-to-door sales tactics to trick them into signing their contracts. Investigations on Pinnacle’s sales tactics reveal that representatives of Pinnacle made false and misleading statements about their competitors and contract terms.
Pinnacle sales representatives purportedly targets consumers who were contacted with a competing company and misled those consumers to believe that Pinnacle has entered in a new contract with that competing company or that the company has gone out of business. Upon such representations, consumers would enter in a new contract with Pinnacle.
Pinnacle also purportedly misrepresent the terms on their standard consumer contract, including cost, sales taxes, and time limit of the service. When Pinncle was supposed to make “Welcome Calls” to review the contract terms with the consumer, the company allegedly coached consumers or impersonate the consumer through the representatives’ questions.
Pinnacle has agreed to allow all New York contracted consumers to receive full compensation as well as an option to cancel their contract with Pinnacle without incurring any cancellation fees. Pinnacle has also agreed to pay $150,000 in New York State penalties for their unlawful sales practices.