Lehi-based Vivint Smart Home has ended a federal lawsuit in Florida by agreeing to pay a $10 million settlement to ADT Inc. The action alleged that Vivint representatives used deceptive sales practices when approaching ADT customers in an attempt to persuade them to sign long-term contracts for Vivint home security equipment and services.
The terms of the settlement are not public record and the report of the settlement came from Boca Raton, Florida-based ADT. The action follows several other similar lawsuit settlements entered into in the past year by ADT, the company said. Included were settlements with Orem-based Alder Security and two Texas-based Monitronics dealers.
Vivint did not respond to requests from The Enterprise for comment on the settlement.
“ADT is a brand trusted five times more than any other security company. When others misuse that trust to prey on innocent consumers, it is despicable,” said P. Gray Finney, ADT chief legal officer. “We hope these lawsuits and ensuing settlements send a strong and clear message that deceptive sales practices must end. Not only does it harm our customers, it also harms the value of having a trained security professional in the home, which is how most reputable security companies operate their businesses.”
ADT filed its lawsuit against Vivint on April 4, 2017, in the U.S. District Court for the Southern District of Florida after receiving complaints from nearly 1,000 ADT customers who stated Vivint made false or misleading statements to switch their security service from ADT to Vivint, said ADT in a recent press release. Part of the sales approach to which ADT objected allegedly involved Vivint representatives leading ADT customers to believe that ADT had become a part of Vivint, ADT said.
“ADT will continue to protect its customers and will pursue legal action against companies that choose to misrepresent themselves to deceive those customers,” said Finney.
ADT operates in the United States and Canada with home security and automation systems for homes and businesses. The company announced on Dec. 1 that it had filed for an IPO in an effort to raise $2 billion by offering 111 million shares of common stock. In December 2016, the company was purchased by private equity firm Apollo Global Management LCC.
Vivint was founded in 1999 as APX Alarm Systems and was renamed Vivint in 2011. Vivint develops and markets “smart home” monitoring and security devices controlled by mobile phone apps. The company has more than 4,000 employees in Utah and 11,000 employees worldwide. Formerly relying on door-to-door sale forces, Vivint recently announced a partnership with Best Buy for the sales of its products by the consumer electronics giant as an initial step into brick-and-mortar retailing.
In 2017, Vivint also settled suits in Texas, Pennsylvania and Wyoming while denying any wrongdoing.