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Illinois Attorney General Lisa Madigan
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October 27, 2009

MADIGAN FILES SUIT AGAINST PINNACLE SECURITY

Attorney General Alleges Company Used Misleading Sales Tactics to
Sell Security Systems

Chicago — Attorney General Lisa Madigan today filed a lawsuit in Vermilion County Circuit Court against Pinnacle Security, LLC, for allegedly selling home security products and services using deceptive sales tactics, often leaving unsuspecting customers locked into two separate sales contracts for security services and paying unnecessary fees.

"Our investigation revealed that Pinnacle Security's sales teams have purposely deceived consumers to make a sale," Madigan said. "Many Illinois homeowners who signed up for these products and services based on the company's false claims are now stuck paying for services that they did not need. In a difficult economic climate when every dollar counts, this is especially maddening."

According to the Attorney General's lawsuit, the Orem, Utah-based company employed a door-to-door sales force that targeted current customers of other, rival home security services, such as ADT. These door-to-door sales teams used false or misleading statements to convince Illinois residents that Pinnacle Security had secured strategic partnerships with rival firms like ADT or that ADT had gone bankrupt and that Pinnacle Security would be servicing ADT customers as a result. Based on these false or misleading statements, the sales teams would convince consumers to sign a new contract with Pinnacle Security. In some cases, the defendant's sales force also allegedly misrepresented that the company would not charge consumers an installation fee and that the monthly service charge would range from a promotional rate of $21.99 and $39.

After signing new contracts with Pinnacle Security, however, consumers discovered that ADT was still in business and that no business relationships existed between the two rival companies. At that point, Pinnacle Security allegedly refused to allow consumers to cancel their contracts, leaving consumers liable to pay on both their original home security contract with ADT (or another home security company) and their new contract with Pinnacle Security. Madigan's lawsuit also alleges that the company misrepresented its fee structure by in fact billing its customers an installation fee of $99 and an inflated $49 monthly charge for a 38-month contract. Madigan's Consumer Fraud Bureau has received 27 consumer complaints against Pinnacle Security.

Madigan's lawsuit charges Pinnacle Security with violating the Illinois Consumer Fraud and Deceptive Business Practices Act and asks the court to order the company to pay civil penalties of $50,000, an additional $50,000 penalty for each violation committed with the intent to defraud, an additional $10,000 penalty for each violation committed against a senior citizen 65 years of age or older, and the costs associated with the investigation and prosecution of the lawsuit.

Assistant Attorney General Philip Heimlich is handling the case for Madigan's Consumer Fraud Bureau.

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