The Minnesota Attorney General took legal action against two separate companies in Arizona and Utah for consumer fraud against senior citizens in the state, both for allegedly using high-pressure tactics.
The first lawsuit alleges Orem, Utah-based AMP Alarm 's unsolicited sales calls for security alarms and long-term monitoring agreements violated the Minnesota Personal Solicitation Sales Act. Salespeople must disclose their name, the company they represent, the product they are selling and be clear they are selling a product, according to that law.
One of AMP's tactics, the lawsuit alleged, included describing the alarm as "free" without mentioning a required long-term contract to receive the hardware. This agreement locked consumers into five-year contracts which required 80% of future payments to be paid if canceled after more than three days, which the company apparently failed to tell consumers.
The U.S. Federal Trade Commission's "Cooling-Off Rule" provides the purchaser three days to cancel an at-home sale of more than $25.
In order to make these sales, representatives showed up late in the evening to the consumer's home, walked into homes without invitation, then threatened to stay until the consumer signed the contract, the state AG alleges.
AMP issued a statement that all complaints received were resolved. AMP's current CEO, Allen Bolden, vehemently denied the Attorney General's allegations in a statement to Security Systems News. Bolden is no stranger to customer complaints. He previously owned Northstar Alarm Services, which drew 107 complaints to the Utah Better Business Bureau.
In April, Consumer Ally wrote about the $60,000 settlement case between APX Alarm Security and the Oregon Attorney General for similar charges of pressuring and misleading senior customers. Despite the similarities of name and accusations and that the two companies are but 35 miles apart in Utah, the two companies do not appear connected.
The second lawsuit on behalf of Minnesota's consumers says EMT Medical of Arizona also misled the elderly. The company allegedly promoted its medical safety product as capable of providing personal health information immediately to emergency responders. However, the product has no affiliation with any hospitals or emergency responders in Minnesota, and is instead an online storage repository for medical information. Many of the customers were not computer-users, and as many as 85% of those who purchased the product did not enter their information in the system.
In addition to scare-tactics, the suit alleges the company told consumers their product was required by federal law and by Medicaid. They also told consumers that medical respondents would not come to their home in an emergency if they didn't buy the product.
In a related consumer alert, the Attorney General warns to be wary of salespeople who attempt to invoke fear by entering into a home without invitation. additionally, consumers are advised to read the fine print on all contracts.
Take the first steps to building your portfolio.View Course »