You have probably read or heard horror stories of people who signed home security contracts after getting visits from door-to-door sales reps, only to discover later on that doing so was a mistake. Home security contracts are not bad in and of themselves. But like any other kind of contract, they come with certain language that could be detrimental to consumers.
The best course of action for anyone thinking of agreeing to a contract is to have it looked over by an attorney before signing. Unfortunately, certain home security companies employ high-pressure tactics designed to get consumers to sign right away. That is the first red flag. Don’t ever fall for high-pressure tactics regardless of the product or service.
If you have been thinking about professionally installed and monitored home security, here are five things to know about contracts before you sign one:
1. Contracts Are Not Mandatory
Contracts have been the industry standard since the very beginning. But they still are not mandatory. Take Vivint Home Security. Customers can access their HomeProtect program contract-free. HomeProtect offers affordable entry-level security systems with free installation and optional monitoring. But monitoring is provided month-to-month. Customers can cancel anytime.
Consumers can also avoid contracts by going down the DIY route. DIY home security is not as convenient as professionally installed and monitored security, but it is contract-free. You simply pay for the equipment, then install and monitor it yourself.
2. Contracts Are for Service
The purpose of a home security contract is defined by what it covers: monthly monitoring service. Monthly monitoring is considered an ongoing service that the provider is committing to. In exchange, they want their customers to commit to a monthly subscription over a set period of time.
One of the benefits of the contract is that it lays out the rights and responsibilities of both parties. As a consumer, you get a clear idea of what you can expect from your monitoring provider. You will also have a set monthly subscriber fee you can rely on for the life of the contract.
3. Contracts Require a Significant Time Commitment
Rare is the home security contract with a one-year lifespan. The industry average is three years. However, I have seen home security contracts that last for five years or longer. That is quite a time commitment. Even three years might be too much for some consumers.
Locking a customer in for 3-5 years is mainly a benefit to the service provider. Here is the thing to watch out for: contract language that imposes a harsh financial penalty for ending the contract early. Service providers build cancellation fees into their contracts in an attempt to recoup at least some of the cost of a customer leaving.
4. Contracts Reduce Equipment Costs
One of the bright sides of home security contracts is their tendency to reduce equipment costs. Service providers can charge less for equipment because they make up for some of it with monthly monitoring fees. From the consumer’s perspective, a contract could mean less money upfront because the contract spreads equipment costs over many months.
5. Your Credit Rating Matters
Finally, home security contracts are not black-and-white in terms of rates and terms. As a consumer, your credit rating will likely impact the quality of your contract. So if your credit is poor, do not expect the most attractive rates and terms from home security providers.
Home security contracts can be beneficial to both consumer and the service provider. But if consumers are not careful, they can pay a high cost for a contract whose benefits go primarily to the home security company.
