How To Avoid Scams When You Shop for a Home Security System

Before You Sign a Contract for a Home Security System 

Security systems do more than just warn you about intruders — they also can notify authorities about a medical emergency, offer video surveillance, and monitor smoke, carbon monoxide, and water levels or pressures. Some systems also are linked into your home's wiring, heating, or lighting systems, and you use your cell phone or computer to control them. Once you decide what you’re looking for, here’s what to do next.

Get references. Talk with friends, family, neighbors, coworkers, and current customers about home security systems they have experience with.

Read about different companies. Search online for a company’s name, plus words like “complaint” or “scam.” See what other people are saying about their experiences with the companies and systems you’re considering.

Check that a company’s contractors’ licenses are current. Visit the National Association of State Contractors Licensing Agencies for the right agency to contact in your state.

Get written estimates. Reputable companies won’t try to sell you anything before learning about your needs and the layout of your home. Find out about

• Services
  • Does the company offer interactive services like smoke and fire detection, remote control, video surveillance, email notifications, and special apps for smartphones?
  • What happens if the power goes out? Is there a back-up battery system?
• Installation
  • Who will install and monitor the system? Some companies subcontract this work to third parties.
• Contract Period
  • How long is the contract period for monitoring? One year? More?
  • Are there penalties for early termination?
  • What happens if you move before the contract period ends?
• Monitoring Cost and Details
  • How much does monitoring cost?
  • How often will you be billed?
  • Does the company call you before or after notifying authorities if an alarm goes off?
  • What happens if the company can’t reach you when the alarm goes off? Is the alarm reset? Do they call the police? Or other people?
• Warranty and Repairs
  • What does the warranty cover, and for how long? Is it from the manufacturer or their installer?
  • Who is responsible for repairs or upgrades to the system?
• Cancellation Policies
  • What happens if you change your mind? How are refunds handled? Find out before you sign any sales and service agreements.

Read the contract. Once you’ve chosen a company, make sure that the written contract includes all promises made by the salesperson, is dated, and includes the seller’s name and address. Be sure your contract package includes

• the installation price

• the monthly, quarterly, or annual monitoring fee

• the contract period

• any discounts

• a written warranty

• the owner’s manual

• an explanation of your right to cancel the deal

• cancellation forms

Contact your police and fire departments. Ask whether you need to register your system, if there’s a fee to register, and if there are fines if they respond to false alarms.

How To Avoid a Scam

Salespeople might knock on doors in your neighborhood, pitching home security systems. There’s nothing wrong with that. Many companies do it to drum up business. Unfortunately, so do scammers and dishonest businesses.

Some state laws require door-to-door salespeople to tell you their name, the name of the business they represent, and what they’re selling before they ask you any questions or make any statements. Other states require salespeople to show you their “pocket card” license and a photo ID. Take a few minutes to look over their documentation.

Here are some ways to spot and avoid dishonest sales agents and scammers that might try to get you to buy home security systems and services that might not be right for you.

Slow down if someone says you need to act now to get the deal they’re offering. Scammers and dishonest businesses might try to get you to sign a contract right away by telling you that the equipment will be free if you do (a lie). More than likely, strings are attached. To get your so-called “free” alarm, you may have to sign a long-term and expensive system monitoring contract.

Don’t let anyone pressure their way into your home. It’s not rude to tell a salesperson you’re not interested. It’s much easier — and safer — to say “no” on the doorstep than to try to get the salesperson to leave once they’re inside. If a salesperson won’t leave, call the police.

Ignore attempts to scare you. Scammers might talk about a made-up rash of supposed burglaries in your neighborhood. Don’t take their word for it. Check with your local police department and shop around before you sign a contract. 

Know dishonest sales agents and scammers often falsely say — or imply — they’re from your existing security company. They might say they’re there to “upgrade” or “replace” your current security system. (They aren’t.) But once they go inside your home, they may install a new security system and have you sign what turns out to be an expensive contract for the monitoring service. Instead of letting them in, call your security company. Check whether they sent a sales agent to your home.

Doubt anyone who claims your security company has gone out of business. Scammers often lie, saying they’ve taken over your security company’s accounts. They’ll say you have to buy new equipment and sign new contracts. But normally, your current company would tell you about a change like this — you wouldn’t hear about it through an unannounced visit by another company. So if this happens, call your current monitoring company to get the real story.

What To Do if You Decide To Cancel

You have the right to cancel the deal. The FTC’s Cooling-Off Rule gives you three business days to cancel a deal if you signed the contract in your home, or if you signed in any location that’s not the seller’s permanent place of business. You don’t have to give a reason. You have a right to change your mind, even if the equipment has already been installed.

Also, some alarm companies include a return policy in their contracts. This policy gives you a certain number of days to test the equipment and services. If you decide the system is not for you, you have a right to return the equipment, cancel the service with no or with minimal penalties, and get a refund.

The salesperson must give you two copies of a cancellation form (one to keep and one to send back to them) and a copy of your contract. The contract must be dated, show the name and address of the seller, and explain your right to cancel. You may have additional consumer protections under state law. Check with your state attorney general or local consumer protection agency.

Report Scams

If you or someone you know has seen or suspect a scam, it is important to report it to

• the Federal Trade Commission (FTC) at ReportFraud.ftc.gov
• the local police department, your state attorney general, or local consumer protection agency