2.21.23 – Scott Goldfine – Boston
The company provided home security monitoring services on a monthly-fee basis but ignored consumers’ attempts to cancel their agreements and misinformed them of their rights, according to the settlement.
The Boston Globe reports that a home security firm will pay $6.5 million to settle allegations brought by the office of Attorney General Andrea Campbell that it “deceptively trapped” consumers into long-term, automatically renewing contracts. Connecticut-based Safe Home Security Inc. provided home security monitoring services on a monthly-fee basis but ignored consumers’ attempts to cancel their agreements and misinformed them of their rights, according to the settlement.
According to the newspaper, “Safe Home routinely ignores or misleads consumers who attempt to cancel their agreements,” the attorney general’s office said in a lawsuit filed in 2019. The company also “routinely automatically renews the agreements of consumers who have attempted to cancel their agreements,” the attorney general’s office said in legal filings. And if a consumer stopped making monthly payments, Safe Home “relentlessly pursues the consumer for monies it claims to be owed without any basis in law, including payments for services that were never provided and a cascade of late fees and compound interest,” the attorney general’s office said.
The Globe report continues below . . .
Some customers who tried to cancel their contracts said the company failed to honor their requests and just kept renewing their annual contracts, according to court papers. “When I told them that I had sent in a cancellation letter in the mail, Safe Home Security said they didn’t receive any documents [from] me and that I had probably sent it to the wrong address,” wrote one customer.
“I told them I sent it in the self-addressed envelope Safe Home Security had sent me to pay the bills in, and they did not give me a response,” that customer wrote. When others called asking for an explanation, customers said they got little help, according to legal filings. “The line would mysteriously go dead, or I would be put on hold for a very long time until I would give up,” another customer wrote in an affidavit.
The attorney general’s lawsuit also alleged that Safe Home billed consumers for security services when its systems were malfunctioning or inoperable and no security was being provided. The 2019 lawsuit, which was the culmination of a three-year investigation, also accused Safe Home of violating the state consumer protection law, known as Chapter 93A, in its debt-collection practices.
The company broke the law by making more than two collection calls in a seven-day period; implying that consumers’ debt would be sent to a third party for collection; threatening to report consumers to credit reporting agencies; and omitting legally required notices of consumer rights, according to the court filing. At the time the lawsuit was filed, the attorney general’s office obtained a court order that Safe Home could not pursue collections while state officials pursued legal further action against it.
The lawsuit was brought by then-Attorney General Maura Healey, who was elected governor last year. Also elected in November, Campbell took office in January. In the settlement finalized by Campbell, Safe Home agreed to comply with Chapter 93A and state debt collection regulations. It also agreed to revamp some business practices, including its contracts with consumers.
At one time, Safe Home, based in Middletown, Conn., had about 17,000 customers in Massachusetts. Much of the settlement money — about $4.7 million — will go toward wiping out disputed debts Safe Home claimed it was owed by consumers in Massachusetts, according to the attorney general’s office. The balance of $1.8 million will go to the attorney general’s office, to be used at its discretion, including to compensate Safe Home customers for losses they incurred as customers.
“My office will always advocate for consumers, especially when they are preyed on by a company that engages in unfair and unlawful business practices,” Campbell said in a press release. “We were able to hold Safe Home Security and its sister companies accountable for their alleged deceptive tactics, securing millions in debt relief for consumers, and we will continue to hold bad actors accountable,” Campbell said.
In the settlement, Safe Home said it denied the allegations and “makes no admission as to fault, liability or damages.” A lawyer for Safe Home said in a statement in response to the settlement that the company “had meritorious defenses to the Attorney General’s disputed claims and allegations” and noted “there was no finding of liability or wrongdoing.”
“Safe Home simply settled its suit with the Attorney General as a business decision and in order to put an end to this protracted litigation,” the statement read. Safe Home “became embroiled in this action largely as a result of activities by a third-party collections attorney,” against whom Safe Home is now “engaged in active litigation,” the statement said. “Safe Home remains committed to protecting communities and to providing the highest level of affordable service.”