Indentured into a longer contract by a mandatory upgrade?

February 21, 2016 6:07 PM

Can an alarm company push you into a longer contract because the alarm won't work without an expensive upgrade?

My friend's home alarm company, Safe Home Security, told her that her alarm works on 2G cellular, which is going to be defunct sometime this year, so they need to upgrade her to 4G. This is costly, and would lock her into an additional two years of a contract she has been eager to get out of next year. (She would like to get out of the contract right now, because she's disliked both their performance in an emergency and customer service in non-emergency situations.) She was also told she can pay $200 out of pocket to do the upgrade with no contract extension, which she doesn't want to do. Can they forcibly extend her contract for two years because of their failure to be able to provide the service that would fulfill her contract under the current terms. Do you think she can practically get out of the contract early?

We live in the US in Baltimore.

posted by spbmp to Law & Government (11 answers total)

Best answer: First thing I would do, if I were in this situation, would be to tell the company "No I don't want to do that, so let's just consider the service cancelled and I won't pay you any more money." I would do that in writing, as well as by phone. I would also look at whatever I signed, to see if there is any provision in there that seems to say that they can force me to pay for upgrades during my contract term.

Without doing those two things, no one can reliably tell you whether it is risk-free for your friend to tell the company to jump in a lake.

(I am not your friend's lawyer)
posted by sheldman at 6:17 PM on February 21, 2016

Alarm companies are super sleazy, but if it's true that the 2G service is getting shut down (I don't know if it is), this doesn't seem horribly out of line to me... The alarm company doesn't run the cell service, so it's not within their power to extend it. If the hardware only works with a service that's getting shut down, it needs to be replaced. New hardware costs money, and they're giving her the option to pay up front or finance it by extending the contract.

I do think it would be reasonable to ask them to just end the existing contract now and stop using the service.
posted by primethyme at 6:38 PM on February 21, 2016

Couldn't she wait until 2G really is gone and then say "see you"?
posted by BillMcMurdo at 6:39 PM on February 21, 2016

Yeah, just cancel the service, then shop around for another company. I tend to think of these services as similar to car alarms: pretty much useless. But if you think you need one, you're probably better off if you start afresh.
posted by monospace at 7:02 PM on February 21, 2016 [1 favorite]

Best answer: I don't know the answer but it might help to reframe the question slightly, both for your responses here and for her negotiations with the company. It looks like the alarm company are saying that because of a change in the third-party tech that they use, there is a mandatory upgrade that will cost your friend $200. They're offering to waive the $200 if she takes on a longer contract, but that's a red herring - she doesn't want a new contract. So the question becomes: can the alarm company legally oblige your friend to pay $200 for an upgrade while she's still under contract?
posted by nomis at 8:06 PM on February 21, 2016 [3 favorites]

Best answer: I would read the contract's termination provisions. It sounds like if she just waits until 2G goes away, the company will not be providing the service in the contract.

MOST likely, their lawyers thought of that, and there is a thing in there protecting them from getting sued for something they can't provide through no fault of their own. But I would also expect the remedy for that is that the contract is terminated. Which is what she wants.

But my expectation may not be what's in there; you'd have to read it.
posted by ctmf at 8:17 PM on February 21, 2016 [1 favorite]

Best answer: The key words here are "material adverse change" to the contract. This is the same way people legitimately get out of cell phone contracts all the time. I'm not a lawyer, this isn't legal advice, but if they change the terms of the contract on you, you can get out. Does she know the specific date they told her the service would stop working? Send a short certified letter canceling as of that date. The company should have forseen the end of 2G data service, it's only been obsolete since, what 2008? It's certainly not your friend's fault! It's possible the response will be to do a free upgrade, but under no circumstances should your friend sign anything they give her; contract extensions are frequently snuck into that sort of thing.
posted by wnissen at 8:34 PM on February 21, 2016 [1 favorite]

Best answer: IAAL, IANYL, TINLA. I think your friend needs to proceed very carefully (both in what she says to the company, if she calls them) and what she writes to the company (if, as is preferable, she writes rather than calls). If she calls, I think there's a high chance of a "misunderstanding" that gets her stuck in the contract or dinged for the upgrade charge. So if I was her, I wouldn't call them. (Even if she could get the phone rep to agree to whatever she wants, she'll have no proof of it when something else happens anyway.)

If she writes, it needs to be short & sweet, and a Maryland lawyer could probably give her the magic words to say. But unfortunately, it might cost her as much as sticking with the contract. I don't know the magic words (since I don't practice in this area of law, and I'm not admitted in Maryland) but I don't think the prior answers have quite got it, either. ("Material adverse change" is relevant, but it's not the magic words. And "let's just consider the service cancelled" leaves too much wiggle room: it's an invitation to do something that they don't want to do. What if they reply "Let's not!"?)

Maybe something like:

I will not pay the upgrade fee, and I will not extend my contract. I will stop paying my subscription fee if the service stops working. (And if she's feeling saucy:) I will seek damages for your breach of contract if the service stops working before [current contract end date].

Please confirm in writing your receipt and understanding of this letter.

I'd send it certified, but IAAL, and I don't have time to dick around with "oh, we didn't get that letter." Keep a copy, because something is bound to go wrong.

Again, IAAL, but IANYL and TINLA.
posted by spacewrench at 10:11 PM on February 21, 2016 [5 favorites]

If they can no longer provide the service as outlined in the contract, don't they have to let her out of the contract? I mean in a lot of cases there'd be more things they'd be required to do, but don't they have to at least let her out of the contract in that situation, if she wishes?
posted by gloriouslyincandescent at 10:31 PM on February 21, 2016

Best answer: The 2G sunset is real -- the big carriers reserve the right to disable 2G starting January 1 2017. But it will be done city-by-city, and could take 2 years or more for the entire country to lose 2G service -- we're talking replacing equipment at tens of thousands of base stations, and there's no really strong incentive to do it for the carriers. If she doesn't care about the alarm anyway, it's probably best to roll the dice and not upgrade -- there's a high probability it will continue to work for a year or two.
posted by miyabo at 5:32 AM on February 22, 2016

Best answer: It sounds like the move from 2G to 4G is going to cause turmoil in the market. Everyone who is the least bit disenchanted with his aarm company is going to be shopping around. I would expect many companies would be giving discounts to get userss to switch. So shop around. And, at least, tell your present company that you at looking at alternatives.
posted by SemiSalt at 7:01 AM on February 22, 2016 [1 favorite]