Company fined for duping NY homeowners

August 12, 2010 03:00PM

AG Andrew Cuomo

Attorney General Andrew Cuomo announced a settlement today with Pinnacle Security Group, a Utah-based company that used deceptive door-to-door sales tactics to trick close to 4,000 New York homeowners into signing contracts for unnecessary services. The attorney general’s investigation revealed that Pinnacle’s door-to-door sales staff often targeted homeowners who had existing contracts with other security companies. In a deceptive practice known as “slamming,” Pinnacle made false representations to convince people to sign up for their products even though the consumer had a contract with another home security company. Pinnacle misled homeowners into believing that their existing home
security provider had gone out of business, had merged with Pinnacle or was in some way already affiliated with Pinnacle. Homeowners were then stuck paying for redundant monthly services from two security companies, including upwards of $50 per month for Pinnacle. Those who tried to void the contract were faced with cancellation fees. The settlement requires Pinnacle to provide full compensation to all New York consumers who signed up with the company since January 2008 and were subject to deceptive sales practices. The company must also pay a $150,000 penalty and reform its sales practices. TRD