CHICAGO (CBS) – Home security is a billion dollar business and one company, ADT, is viewed as the gold standard.
However, a six-month CBS 2 investigation found serious questions about the practices of ADT’s largest authorized dealer. CBS 2 Investigator Brad Edwards found that dealer was the subject of more than 1,600 complaints over three years to the Better Business Bureau.READ MORE: IDES Kept Offices Closed While Many Struggled To Get Their Unemployment Benefits: What Really Happened Inside And Outside Those Walls
CBS 2 found a common theme: Hundreds of frustrated customers said they were duped, in some cases into overpaying by thousands of dollars. Despite that, the BBB of Indiana continued to give the company its highest rating – until changing it just a few days before this report was published.
Lisa of Leaf River, Ill., said she believed it would cost $27.99 a month to secure her home, plus a $99 installation fee. When a representative came to her home, he said it would cost an additional $3,000. Matt of Shreveport, La., said he expected, as promised in the ads, a “free package” that included several hundred dollars in security equipment. Then “a tech came and the guy talked me into about $1,400 worth of equipment,” he said.
CBS 2 is withholding last names of customers and former employees interviewed for this story.
One former installation technician, Stephen, supported those accounts.
Stephen says his trainer once sold a veteran on a fixed income, about $5,000 worth of security devices for his home. Stephen said he once sold another client $12,000 worth of equipment—when, according to Stephen, the homeowner only really needed about $3,000.
In the case of the veteran?
“I believed we could have met all of his needs for about $250,” Stephen said. “I went outside for the rest of the install because I couldn’t look that guy in the eyes.”
Customers say they frankly didn’t even know who they were signing up with.
“I answered what I thought was an ADT ad,” said Johanna of Chicago. Numerous other customers told CBS 2 the same thing.
“It says ADT all over the place,” said Rebecca, also of Chicago.
ADT might be plastered over the ad, but it wasn’t ADT per se. On the 12th line of small print at the very bottom of the ad—there is a reference to the real company, DEFENDERS, an Indianapolis firm.
“I ended up getting service from a company called DEFENDERS that I had never heard of before,” said Marcus of Pasadena, Md.
DEFENDERS is ADT’s top authorized dealer with about 2,800 employees, according to a company spokeswoman, Whitney Ertel. The company says it has installed more than two million home security systems in the United States. Its biggest markets are Illinois, California, New York, Florida and Texas.
According to a profile in the Indianapolis Business Journal, the company topped $600 million in revenue in 2018. Ertel did not dispute that reported number but would not provide those figures to CBS 2. “DEFENDERS is a privately held company and, as such, does not disclose specific financial or operational information,” she said.
In a YouTube video, DEFENDERS’ CEO Jim Boyce boasts, “At DEFENDER, we are called to grow and inspire leaders who love and serve people.”
In September, CBS 2 began looking into DEFENDERS. We reached out for comment to the Electronic Security Association, a trade group. Instead of hearing back from them, we received an email from Bob Tucker from Boca Raton, Fla., writing on ADT’s behalf.
“We are committed to delivering exemplary service, and that’s why both ADT and DEFENDERS have consistently earned A+ ratings from BBB [the Better Business Bureau],” Tucker wrote in the email.
An A+ and, as CBS 2 found, DEFENDERS had those aforementioned 1,600 complaints filed with the BBB in the past three years.
How can a company with that many complaints continue to receive an exemplary rating? CBS 2 reached out to the president of BBB in Central Indiana.
“So what we’ve seen with DEFENDERS is they are prompt with addressing their complaints, and they do that in good faith,” said Tim Maniscalo.
Using a variety of factors, the Bureau uses an algorithm to assign ratings, including responses to complaints. On its website, the organization says, “BBB ratings are not a guarantee of a business’s reliability or performance.”
In many cases, DEFENDERS did respond to the complaints, but not to customers’ satisfaction. Maniscalo said the BBB considers issues resolved even if the customer is still unhappy. The customer has the option of going on to the BBB website, seeing the complaints and deciding whether they want to do business with that company.
Despite those complaints, BBB of Central Indiana gave DEFENDERS its A+ rating.
“In some cases, the consumer might not be satisfied,” Maniscalo said.
Prompted by our investigation, the BBB, on Jan. 31 temporarily removed DEFENDERS rating as it looks further into their business practices.
Separately, in more than 200 Yelp reviews, CBS 2 found only five reviews that were above one star. Overall, DEFENDERS got one star out of a possible 5 on Yelp.
In two cases, reviewers—apparently befuddled by the scale—gave the company five stars but stated “absolutely scam” and “these people are crooks.”
In the hallway of the Indianapolis-based BBB, its eight Standards of Trust adorn the walls. At the top of the list: “Advertise Honestly” and “Tell the Truth.” Its mission statement, contained in a recent tax filing: “Promote business integrity and public confidence in advertising …”
CBS 2 could not find one case in which a DEFENDERS customer only paid $27.99 a month and got the free system – the advertised deal. Ertel, the DEFENDERS spokeswoman, despite saying the company doesn’t give out sales numbers, told CBS 2 that 13,000 customers in 2018 signed up for the $27.99 advertised rate – a part of the advertised deal.
Maniscalo was asked whether that was a concern for the BBB.
“If that’s the case, that’s something we would want to look into,” Maniscalo said.
The BBB says the number of complaints don’t reflect the full story.
“Once again if you put that in perspective of the number of homes they’ve protected over the past three years, I think that puts it in perspective,” Maniscalo said.
Maniscalo was asked whether he knew of any other company with that many complaints.
He suggested Angie’s List.
CBS 2 found fewer than 500 complaints for the contractor referral service, less than a third of DEFENDERS’ complaints.
Yet, Angie’s List has a lower rating than DEFENDERS, an A –.
According to tax records, the Indiana BBB has $1,941,386 in revenue. The BBB says 92 percent of that comes from accreditation fees paid by businesses.
“They [DEFENDERS] do not give us money other than the accreditation fee,” said Maniscalo, who did not know the cost of DEFENDERS’ fee. He offered to find out.
Weeks later, after several requests, the BBB declined to disclose the fee, saying DEFENDERS is a privately held company.
“I will tell you emphatically, we are not a pay-to-play organization,” said Maniscalo. “We are a standards-based organization, and once again it is our board of directors that is responsible for overseeing that and overseeing the mission.”
One member of the BBB’s board, according to tax filings, is Eric Mansfield, vice president at DEFENDERS. Board members approve the BBB’s budget and can remove a company’s accreditation.READ MORE: Chicago Weather: Lakeshore Flood Threat Continues
DEFENDERS says it pays “the standard fee set by BBB and is proud to serve on the Board of the BBB.”
Maniscalo also disclosed that he spoke with DEFENDERS CEO Jim Boyce the day before he spoke to CBS 2.
“He was very adamant about his commitment to resolving consumer complaints,” said Maniscalo, who said he would ask Boyce to respond to CBS 2’s inquiries.
Boyce never did.
Consumers are not the only ones with complaints. Employees and former employees have sued DEFENDERS in Georgia, Mississippi, California and Delaware.
The collective action suit in Delaware, which includes current and former employees throughout the United States, alleges the company violated the Fair Labor Standards Act.
The Mississippi suit alleges “… intentional wage and hour law violations” and that an installation tech alleged he was “wrongfully discharged” for “complaining to DEFENDERS management about the company’s systemic practice of forcing install techs to commit unlawful consumer frauds upon DEFENDERS’ customers … including cutting holes in the walls.”
We also spoke to a number of former employees.
Owen, one such former DEFENDERS employee, said no customer in his experience ever got the $27.99 basic package deal.
“It was our job to up-sell them in their house even though they were promised the $27.99,” he said.
Stephen, who is not part of the lawsuit, said DEFENDERS set up compensation packages to encourage employees to press clients to buy extra gear, regardless if it was needed.
“We’re paid on what we install, and then we’d get commission on what we up-sold them,” he said.
“If you sold them the bare minimum of what they needed, your checks weren’t even going to be enough to cover your gas, which was what wound up being the problem.
“You write down everything you can think of. I don’t care if you’re four floors up, you’re writing down window sensors on every one of them despite the fact your average thief is not going to carry around a 32-foot ladder.”
Ertel, the DEFENDERS spokesperson, said all employees are paid at least minimum wage and are reimbursed for mileage. “When a family that needs protection wants our basic security system, our Security Advisors are paid a flat amount for that installation. Many times, a family chooses to have extra areas of the house protected,” she said.
Stephen said he would name rooms after the children to improve chances of making more off the deal.
“Show it to them so they see little Billy’s name on it and little Suzy’s name on the window. Say, ‘Well take a look at this and tell me what’s less important.’
“Because now they’re looking at things with kids’ names on it and they can’t think this kid is less important than that kid.”
“It sounded great on paper,” Stephen said. “The pitches – it sounds like you’re doing what you’re supposed to be doing. You’re out solving people’s problems and protecting their homes.
However, that is not all DEFENDERS reps were told to do.
“We were doing way more than protect their homes. We were selling them way more equipment then they ever needed. I mean, we’re talking double and triple redundancies, just to ‘make sure’ they’d be safe,” Stephen said. “They didn’t need all that crap. That was way above and beyond what they needed. That was to get us money.”
Then there was one thing that customers repeatedly mentioned to CBS 2 Investigators that made no sense, at first.
They said an installer immediately put a hole in the drywall.
“They didn’t ask me or anything, they just cut a hole right in my wall,” said one customer.
Stephen said customers would often tell the installers to stop.
“It was the first tactic we were taught,” said Stephen. “You drill the hole to drop your wire, the four holes to put your anchors in and get that key pad up and mounted.”
Kevin worked for DEFENDERS for a decade and liked it. He, too, was told to drill the hole right away.
“They would explain it to us is that’s kind of a way to get the customer to commit,” he said.
Stephen said, “Now either they’re going to get a system or they’re going to patch a wall, and nobody wants to patch a wall.”
CBS 2 Investigator Brad Edwards went to the home of DEFENDERS founder, Dave Lindsey. He lives in a sprawling Indianapolis estate. He was not home.
In a video, Lindsey vouches for a company that brought Christian-centered practices into the workplace.
“When we first started DEFENDERS” he said. “I really had a goal of Jesus and God being a part of our business. “
DEFENDERS just celebrated its 20th anniversary. In an anniversary message posted on YouTube, Lindsey said, “God has bigger plans for us than I can sit here and reflect on, but I’ll take a shot on a couple. We’ve, since the early days, always thought about being a billion-dollar company and that would be a dream come true.”
Based on interviews with CBS 2, customers’ hopes for home security switched swiftly.
For Matt, in Shreveport, LA., “things went sour about an hour after the installation.”
He was inexplicably charged 19.29 percent sales tax, more than double the sales tax there.
He said he canceled his contract on the second day, which was within the 72-hour window.
Lisa said she canceled her credit cards to stop the monthly charges.
“Absolutely a nightmare,” she said. “That was the only way to get ADT to stop charging my charge card.”
Susan sang a similar song in Lima, Ohio.
“I have gone to my bank and put a stop pay on any debits for any transactions they try to pull from my bank account.”
Johanna of Chicago missed the cancellation window.
So she paid for it and monitoring she says she never used for two years. Finally, it was over.
“And then once everything was canceled, the system started going off in the middle of the night, and there was no way for me to turn it off.”
What did she do?MORE NEWS: Climate Change And Chicago's Lake Michigan Shoreline: What The Future May Hold And The Action Being Taken
“I smashed it with a hammer,” she said. “You would have, too.”