Days later, the salesman, whose name Harris doesn’t remember, returned for a follow-up call. Harris was away again. This time, he told Dana he was single. What should have been a perfunctory customer-service check-in dragged on for an hour, until Harris’s wife finally asked him to leave. “He was trying to hit on my wife,” Harris says.
Then Harris discovered that the APX system ran on the analog phone line, just like his old alarm had, and it cost $45 per month before fees and taxes, $5 more than he was promised. Suspicious, Harris traipsed up the street to Damgoode Pies. The pizza place had never switched to APX. Harris canceled his credit card, bought fraud protection, and filed a complaint with the Arkansas attorney general—after which, he says, APX released him from his contract.
Across town, Carrie Raynor also opened her door to an APX salesman named Richard that spring. He told her he was there on behalf of her existing provider, ADT, to attach lights to the ADT sign on her front lawn. Then Richard said that she qualified for a wireless upgrade, as long as she gave him her credit-card number to update the company’s records. When she asked him to use the card ADT had on file, he said that his company was only an ADT contractor.
She signed a contract. “They had a crew in within 15 minutes,” Raynor recalls. “I told them it wasn’t a convenient time,” but Richard explained that this was the only day they could update her alarm system. Raynor says the technicians seemed to be in a hurry, and she realized that these were not ADT contractors at all but “a totally different company.” By that point, the APX technicians had disconnected her ADT system, but Raynor refused to leave her home unprotected so she stuck with APX. “I hate that we’re paying that company to mislead other customers,” she says.
She took a photo of their license plates with her cell phone. After they left, Raynor noticed that APX had not replaced the sensors on her front windows. She called Richard, and two technicians returned to finish the job. After consulting with her husband, Stan, she too filed a complaint with the Arkansas attorney general that very night.
The attorney general, Dustin McDaniel, was hearing many stories like these. In 2008 and 2009 alone, 30 consumers complained to his office about deceptively long contracts; promotions that didn’t exist; bogus alarm-system giveaways; salesmen who impersonated representatives of a rival firm; fake discounts for switching to APX; and damage to the home of a customer who canceled service and had equipment removed.
The complaints allege that aggressive and misleading salesmen took advantage of vulnerable customers until McDaniel filed suit in September 2010. One was accused of lying to a 78-year-old woman about the length of the contract she was signing. Others were said to have pressured a woman with dementia and an 89-year-old blind woman with Alzheimer’s. “I was confused and disoriented from my medication,” a patient with a mental illness wrote in her complaint. “I felt overpowered and not in control of the situation.”
“Consumers opened their doors to these salesmen who pressured, deceived, and misled them into purchasing a product and service under false pretenses,” McDaniel said, announcing the lawsuit. The state charged the company with violating its Deceptive Trade Practices Act; a June 2012 settlement resulted in a $125,000 payment to the attorney general without an admission of wrongdoing.
APX’s problems were deepening elsewhere, too. In January 2009, the company settled with Maryland after that state’s attorney general accused it of “unfair and deceptive trade practices.” In September, it was permanently banned from operating in Louisiana. In December, a few months before the Oregon attorney general called its business practices “unacceptable,” Romney hailed APX as a model of American capitalism. In a typical settlement, the company agreed this September to pay a fine to the state of Wisconsin and to cancel customers’ debts in the state; it also promised to change its practices. In other settlements, too, it admitted no wrongdoing.
In the past three years, the Better Business Bureau has received more than 1,400 complaints about the company. (In just two months this summer alone, police in Palm Bay, a Florida city of 100,000 people, recorded scores of complaints, according to the newspaper Florida Today.) In comparison, Stanley Convergent Security Solutions, Vivint’s next-largest competitor according SDM magazine’s 2011 rankings, has been the target of just 40 complaints during the same three-year period.
Vivint did not respond to multiple requests for comment made by National Journal.
CORPORATE PHILOSOPHY
After Todd Pedersen completed his two-year stint as a Mormon missionary, he returned to Brigham Young University to finish his bachelor’s degree with an incredible background in door-to-door sales, the core technique of Mormon evangelism. There, Pedersen hit upon the idea for APX and opened shop in 1999. The door-knocking sales force he built was, at first, composed largely of returning missionaries.
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