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SECURITY SYSTEMS NEWS FEBRUARY 2011 www.securitysystemsnews.com RESIDENTIAL SYSTEMS 29 Ohio AG files complaint against Pinnacle But summer model company says any concerns have already been addressed By Tess Nacelewicz OREM, Utah—The state of Ohio recently filed a lawsuit against Pinnacle Security, alleging deceptive sales practices. However, the summer sales model company, based here, says it believes the charges relate to previous con- cerns the company has already addressed. In the lawsuit, filed Dec. 17, Attorney General Richard Cordray accuses Pinnacle “of installing secu- rity systems in Ohioans’ homes based on misrepresentations and then failing to honor rights to cancel- lation.” Cordray says that is among other violations Pinnacle allegedly committed against Ohio’s Consumer Sales Practices Act. “Through door-to-door sales, this company encouraged consumers to sign contracts and then installed home security systems on the spot,” Cordray said in a statement. “My Shift Continued from page 28 To counter that, the company is reaching out to the nation’s approximately 122 local BBB affili- ates and to local licensing boards in a variety of ways, including in-person visits and informational campaigns, to let them know the company is different from the way it has been negatively portrayed. And how has Pinnacle evolved? Among changes Hafen said cited is a top-to-bottom shift in organizational culture. He said that the company has “always had a sales-oriented cul- ture focused on results and, in particular, sales volume.” In the past three years, the company sold about 250,000 accounts, Hafen said. However, he said, that meant having as many as 1,800 summer sales representatives—most of them young college students— going door to door selling for Pinnacle around the country, and in some states being accused of unethical sales practices. “Sometimes you get these rogue sales reps that make bad deci- sions,” Hafen said. The sales representatives also ran up against licensing require- ments in some communities, which Hafen said were in some cases so complex that sales might be legal on one side of the street but illegal on the other. But to make sure that problems no longer arise, Hafen stressed that the company has “sought out every opportunity to emphasize a change in this sales culture, emphasizing the equal importance of compliance, integrity and ethics along with sales.” SSN IP New Technology office received more than 50 com- plaints, many from consumers who bought the systems based on misrepresentations of the product or its prices. Pinnacle often refused to allow consumers to cancel and con- tinued to bill them for the systems that they did not want. Through today’s lawsuit we are asking the court to issue a permanent injunc- tion to end these sales practices and to order Pinnacle to pay restitution to Ohio consumers.” Stuart Dean, Pinnacle VP of corpo- rate communications, told Security Systems News that the company had not reviewed the lawsuit so couldn’t respond in detail. However, he said, “Our under- standing is that many of the claims are going back to issues raised in 2009 or earlier.” Pinnacle says it has transformed its corporate culture over the past year to address issues, such as “rogue” sales staff using deceptive sales tactics. Kimberly Kowalski, deputy direc- tor of media relations for the Ohio AG told SSN in an email that the complaints cover a period running from “January 1, 2007 up to the date we filed, December 17, 2010.” Kowalski did not respond to a request for further details on the nature of the complaints. SSN LAST CHANCE TO REGISTER! Event starts Feb. 13th Have you registered yet? February 13-15, 2011 Delray Beach Marriott Delray Beach, FL TechSec Solutions is the IP-focused conference where you form partnerships and fi nd solutions. Whether you are an end user, integrator, installer, manufacturer or other security professional, TechSec brings you all together in an environment conducive to learning and integrating leading-edge technology. Don’t miss TechSec. It’s the place to form alliances that’ll drive your business forward. Register Now! Go to: www.techsecsol.com CURRENT SPONSORS: PRODUCED BY: techsecsol.com