There has been much debate over the issue of automatic renewals lately. Automatic renewals of contracts have been a common practice in the and industry.
Providers do their best to secure their customers’ business by luring them in for contracts that are binding for up to 5 years and auto-renewable. Despite being so common, they have been subject to much resentment and lately, many states have approved legislation banning or restricting the practice of automatic renewals.
So weather such renewals are legal and can they be enforced, depends. You need to check with the laws governinghome security systems in your state. As of now, 16 states have restricted or altogether banned auto-renewals. These states are:, California, Wisconsin, Tennessee, Florida, Pennsylvania, Hawaii, Maryland, New Mexico, New York, Arkansas, Connecticut, North Carolina, Illinois, South Dakota, Utah, and Oregon.
The law for each state is different and exactly how it will affect you depends on where you are. However, in general, all security companies are required to conspicuously disclose the automatic renewal clause as well as notify you in some way, before enforcing the renewal. Home security companies are bound to adhere to these laws as there has been a lot of criticism and scrutiny over the matter in the last few years. Failure to comply with the laws could result in penalties such as making the automatic renewal unenforceable, or having the provider’s behavior deemed as deceptive which could lead to a lawsuit, stiff fines and penalties.
Home security systems providers in general use a scenario like contract expiring on Sunday, service being cut off on Monday and your house being burgled on Tuesday, as an attempt to sell you an auto-renewing contract. However, that is rarely the case as most companies continue to provide services and make collection attempts to make you pay for the services. Hardly any monitoring stations will purposely fail to respond to your alarm just because your contract expires. So these marketing gimmicks are best stayed away from.
In fact, in response to the increasing laws being enacted in the regard, eminent attorneys and legal experts rather suggest alarm companies to refrain from such auto-renewed contracts and instead, build the business based on trust and quality. This will only lead to happier customers as customers don’t like to be tied down into contracts. Even if they like a service and plan on staying on it, contracts sound fishy to all people making them unhappy customers ready to move to another company as soonas a chance presents itself. Giving the customers the freedom to choose and then providing quality service that is worth choosing is really the way to go.
Zach Jefferson
Author – Zach has six years under his belt as a marketing manager within the home security industry. He is in charge of keeping site information as accurate as possible, while developing new content ideas for consumers.