Issue link: https://read.dmtmag.com/i/31490
28 RESIDENTIAL SYSTEMS www.securitysystemsnews.com JANUARY 2011 SECURITY SYSTEMS NEWS ADT takes Pinnacle to court over sales tactics Pinnacle contends ADT threatened by Pinnacle’s success By Tess Nacelewicz BOCA RATON, Fla.— Residential security giant ADT is suing Pinnacle Security in federal court, alleging the Utah-based summer model company and its employees used deceptive sales strategies to steal ADT’s customers and damage its reputation. ADT, based here, also accuses Pinnacle of theft of confidential information about ADT customers and breach of contract. However, Pinnacle, for- merly an ADT dealer that went independent in 2006, “vigor- ously denies” the allegations. Pinnacle contends ADT is going after Pinnacle because of its growing success. “We believe it is clear that the largest company in the residential security market ... has targeted Pinnacle because of our growth and market share gains we have made in the residential security industry,” Pinnacle said in a statement to Security Systems News. Pinnacle characterized ADT’s claims as outdated and “without merit,” and said Pinnacle leads the industry in “compliance procedures to help minimize any instances of improper sales tactics.” Pinnacle said it instituted a code of conduct in 2008, which all employees must sign, and said any who violate the code face penalties that can include getting fired. ADT filed the lawsuit Nov. 19 in U.S. District Court for the Northern District of ADT see page 30 World Wide buys Rainbow By Martha Entwistle GARDEN CITY, N.Y.—World Wide Security joined forces with a former competitor with the acquisition, announced Nov. 22, of Rainbow Home Systems of East Meadow, N.Y. “It’s a really attractive tuck-in acquisition for us,” said Mark Simson, CFO of World Wide Security. “Their office was about five miles down the road from us.” The buy includes the assets of Rainbow, 1,200 new, mostly residential accounts, and five employees. All of the accounts have been moved to World Wide’s central station. Former president of Rainbow, Lenny Minervini, has joined World Wide and will focus on sales and operations. Three tech- nicians and one finance/admin- istration employee will also join the company. third-party monitoring for other companies . In business for 30 years, Rainbow had a well-developed specialty in home automation and home audio, services World Wide has always provided too. About 10 percent of World Wide’s resi- dential clients have some home automation or home audio service as well as security, Ingegno said. Has the poor economy affected Mark Simson Joe Ingegno “We also look to acquire key employees with acquisitions,” said Joe Ingegno, VP and owner of World Wide. World Wide does business in the tri-state area. It has 15,000 accounts, 60 percent of them residential. Vision Monitoring, its central, also does this end of the business? Ingegno said fewer customers are asking for high-end audio/video services, but there is more demand for home automation incorporating energy management. Accounts that include some home automation/AV components are particularly good accounts, Ingegno said. SSN McGinn found in contempt By Tess Nacelewicz ALBANY, N.Y.—A federal judge in December found Timothy McGinn, a security investor already facing SEC fraud charges, in contempt of a court order for his involvement in a new investment venture started this summer. The judge called the new invest- ment offering “remarkably similar to those prior offerings” for which McGinn faces the SEC charges. McGinn—who served as CEO of IASG from 2003-2006—and David Smith were two security alarm industry investors charged in April by the SEC with bilking investors in a Ponzi scheme. McGinn and Smith were the principals of McGinn, Smith & Co., an Albany-based investment firm that con- ducted invest- ment dealings in the alarm industry. The com- “The SAC offering is remarkably similar to pany is now in receiver- ship after the SEC in April seized Smith’s and McGinn’s business and personal assets and accused the pair and their company of defrauding investors of at least $80 million. The SEC contends the pair pocketed some of the those prior offerings.” —Judge David Homer money and put the rest of it toward such uses as paying for exotic dancers on McGinn’s You Only Live Once cruise ship busi- ness. The court case is pending. The pair made the news again this fall after starting a new investment venture this summer, Security Alarm Credit. The new company was try- ing to raise more than $500,000 to loan a small Georgia-based third-party monitoring company MCGINN see page 30 Fuel and security good mix By Tess Nacelewicz BOCA RATON, Fla.—Wilsons Fuel attended the Nov. 11-14 Honeywell First Alert Professionals Convention here because Wilsons doesn’t just sell fuel—it also is a Honeywell First Alert security systems dealer. David Wilson, business devel- opment manager for the Nova Scotia-based company, said it expanded into the security space about three years ago. It now offers installation and monitor- ing of alarm systems for custom- ers’ needs ranging from fire and intrusion protection to ensuring their home heating systems aren’t malfunctioning, Wilson said. The company serves commer- cial and residential customers in the Maritime provinces, and has found security dovetails nicely For a more robust version of stories in this section, see: WWW.SECURITYSYSTEMSNEWS.COM n with its role as a heating fuel company that has about a century of experience providing service and installation to customers, Wilson said. “This was just a natural fit,” Wilson told Security Systems News in November. Wilson said more fuel busi- nesses are getting into the security sector. Some are already in it. General Utilities/General Security, based in Plainview, N.Y., was one of the first fuel companies to get into alarms back in 1985, said Peter Allen, manager of General Security. Allen said fuel and security make a good mix. He said General’s decision to add security 25 years ago “came from a desire to level out the very short oil season, which is about four to five months of the year.” Also, Allen said, the oil and security businesses have “a lot of parallels in that you’re selling a product and have service techs and installers.” Both sides of the business also can sell to the other’s customers. General Security has about 44,000 residential and commer- cial accounts in New York, North Carolina and Virginia. General Utilities has about 60,000 fuel accounts, Allen said. SSN BRIEFS ADS wins six awards at First Alert NASHVILLE, Tenn.—ADS Security, based here, was the recipient of six awards at the 2010 Connect to Success First Alert Professional Convention held Nov. 12-14 in Boca Raton, Fla. ADS received the 2010 Circle of Excellence Award in recognition of its service and contributions to the First Alert Professional program; the 2010 Life Safety Award in recogni- tion of its efforts in sharing First Alert Professional’s life safety material with every customer and the dedication of the sales team to overall principles of life safety; the 2009 Technical Service Award; the 2010 Sales Leader of the Year Award presented to Craig Leyers, regional vice president and general manager of ADS, Nashville; the 2010 Community Service Award; and the 2010 Marketing Award. SIA coalition leads to legislative fix ALEXANDRIA, Va.—The Security Industry Association said its teamwork with environmental groups led to the passage of a bill in December to fix a flaw in important federal legislation. On Dec. 8, according to SIA, the U.S. House of Representatives passed H.R. 5470 to enact a fix in the 2007 Energy Independence and Security Act. The act requires electronic devices to meet certain efficiency standards while in “no-load” mode. But SIA said those requirements don’t make sense for security and life safety devices, which are always in “active” mode. SIA, a trade group for the security industry, formed a coalition that it said contained groups such as the Natural Resources Defense Council to draft language for a fix. SIA said the House bill provides for an exemption from the “no-load” requirements for security and life safety products. SIA said multiple Senate pro- posals include the exemption. APX Alarm garners ‘Mobilizer’ recognition PROVO, Utah—APX Alarm Security Solutions recently won recognition in the field service category of the 2010 Mobilizer Awards, which are presented by Mobile Enterprise magazine to honor organizations leading their industries in deploying mobile and wireless solu- tions that improve business processes and deliver ROI. APX Alarm serves more than 500,000 customers nationwide. During a two-year period when APX Alarm grew its serviceable customer base by 60 percent, the company implemented ClickSoftware Technologies schedul- ing and mobile workforce optimization suites to give dispatchers and field ser- vice technicians real-time information and dynamic routing ability.