New Yorkers who the state attorney general said were taken in by a Utah home security company's deceptive sales practices will be getting restitution, and the company is being charged a $150,000 penalty as part of a settlement announced Thursday by the office of Andrew Cuomo.
Orem, Utah-based Pinnacle Security Group Llc is charged with using door-to-door sales practices that tricked consumers into signing up for security services they already had with other providers. Since 2008, Pinnacle has gotten signed contracts with about 4,000 New Yorkers, more than 700 on Long Island.
"I knew it couldn't be just me," said Sabrina Rivera, 35, of Deer Park, who told of a Pinnacle salesperson coming to her house in 2008, saying she and her husband were entitled to an upgrade and that his company was taking over accounts from their provider. Before they knew it, said Rivera, they were being charged $55 by both companies.
When she called Pinnacle, she said, she was told, "You signed up," and her response was, "Why would I do that?"
In a statement, Pinnacle said the circumstances in New York "predate sweeping compliance initiatives" the company has put in place in the last year. "The conclusions from the attorney general's office are not reflective of our business today as our representatives are now bound by the industry's strongest compliance protocols," said Kelly Walker, the company's chief executive.
According to Attorney General Cuomo's office, the company led consumers to believe their existing provider was no longer in business, had merged or was affiliated in some other way with Pinnacle.
"Pinnacle used dirty tricks and deception to pressure New Yorkers who were simply trying to ensure the security of their homes," Cuomo said in a news release. "This settlement holds Pinnacle accountable for their actions and makes fundamental reforms to the company to prevent such fraud from happening again."
Consumers who signed contracts with the company since January 2008 and were victims of the deception will be compensated and can cancel any existing contract with no early cancelation fees, according to the release. Consumers can call the Attorney General's Consumer Helpline at 800-771-7755 or visit www.ag.ny.gov.
Rivera, who wrote letters to consumer affairs offices and the Better Business Bureau, said the settlement was good news. "It's not even about the money. It's that somebody recognizes this was done to us."