Hidden Camera Investigation: Door-to-Door Hard Sell and Deceit

iStock/Thinkstock(NEW YORK) — The country’s largest home alarm company, ADT, is sounding an alarm about unscrupulous rivals it says are using ADT’s name to trick thousands of customers a year into signing up for rival security systems.

“This is the worst year we’ve seen so far,” ADT General Counsel David Bleisch said in an interview for ABC News’ 20/20, “lying and swindling people into switching, unknowingly switching their monitoring company.”

Bleisch said ADT had received 4,200 complaints this year alone from customers who said door-to-door salesmen appeared to be from ADT but then tricked them into signing up with another home alarm company. And Bleisch estimates those who speak up are just a tiny percentage of their customers who are approached, perhaps up to 100,000.

It’s a tactic known as the “switchover” or “takeover” and it’s one trick in the bag of some unscrupulous door-to-door home alarm salesmen that have also prompted thousands of complaints to the Better Business Bureau, and state attorney general offices around the country, an ABC News 20/20 investigation into the hard sell tactics of some in the billion dollars business of door-to-door sales of home alarm systems has found.

“The door-to-door sales industry is fraught with problems, and the industry has enormous problems,” said Jane Driggs, executive director of the Better Business Bureau in Utah. Many of the complaints focus on Utah-based home alarm security companies that have earned “D” or “F” grades from the BBB.

“They should be honest and ethical — you’re going to someone’s door,” Driggs told ABC News.

Other complaints include some salesmen who exaggerate the crime rate in the neighborhood in hopes of scaring potential customers into buying, or telling them they’ve been chosen for a “free” alarm promotion — even though they’re actually signing up for a long-term plan with expensive monthly monitoring fees.

A video recording of a training session by the owner of one home alarm sales company posted online may help explain some of the complaints.

“Guys, nice people in sales, you don’t make any money. Go to McDonalds,” Adam Schanz, owner of the Salt Lake City-based Alarm Protection, or AP, tells employees in the video.

When discussing homes that have “no soliciting” signs hanging outside, he says, “Do you guys knock those doors? Anybody recording this? Shut it off. You’re not allowed to record. We knock every ‘no soliciting’ door, guys. Why? They’re easy.”

In another training tape obtained by ABC News, a leading door-to-door salesman, Jake Dahl, is shown teaching sales reps how to do the “takeover” or “switchover.” The tape was secretly recorded and shown to ABC News by Ben Kirk, a former AP salesman who’s had a falling out with the company.

“For those who want to cut the corners, they can go ahead and mislead the customer to think that they’re from that alarm company and that they have to get this update,” Kirk, who has worked for several home alarm companies, said of unscrupulous salesmen.

ADT has been trying to stop the “takeovers” by competing home alarm sales companies by suing competitors accused of such actions and offering cash rewards of up to $25,000 for evidence of such swindles. The company paid Kirk $2,500 for the sales training video he showed to ABC News.

Dahl declined to speak with ABC News and Schanz, the owner of AP Alarm Protection, says Dahl wasn’t employed by the company when he gave his presentation and no longer teaches those takeover tactics. Schanz said his company makes sure their customers know what they’re signing up for.

Veteran ABC News consumer reporter “The ABC News Fixer” Stephanie Zimmermann received a “public safety call” about an “increase in residential burglaries and property crimes in the area.” The robo call sales pitch went on to say “ADT will be giving you a free ADT home alarm security system.”

ADT’s Bleisch he said he was sure the call was not from ADT, so Zimmermann responded to the call and set up an appointment and 20/20 set up hidden cameras in Zimmermann’s Chicago area home to see who responded.

When the salesperson, Robert Hall, came to the home, he quickly told Zimmerman he wasn’t from ADT, but from Choice Home Alarm, his own small company. He insisted though that “if you want ADT we can do that for you.”

When confronted by ABC News Chief Investigative Correspondent Brian Ross, Hall again confirmed he was not from ADT, but insisted he had done nothing wrong, saying he had not made the call, and the sales lead had been shared with him by a friend who was an ADT dealer.

“It’s very possible for leads to be transferred from one company to another. It’s pretty standard,” Hall said.

But ADT said that’s not supposed to happen, and Hall was in no one way authorized to sell ADT systems. The company later fired the ADT dealer who had provided the sales lead to Hall.

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