As you plan for the day you can drive off into the happy sunset of your retirement years, there's one factor you might not be accounting for in your finances. Don't forget all the companies that might have an evergreen clause in their contract with you that allows them to keep charging for services months and months after you've canceled them. And that's particularly true if you deal with one of the home security services like Protection One.
Ever since I first wrote about the use of evergreen clauses in the home security racket (see An Evergreen Brink's Heist), I frequently hear from homeowners who having the same problem when they try to cancel their service. Long after the customer has met the initial two or three-year service commitment, the security company will demand they pay for the remaining year's worth of service. In recent months, though, Protection One has replaced Brinks as the home security company I most often hear complaints about.
Maybe it's because I'm getting up there in years myself, but the story of a former Protection One customer in Indiana particularly caught my attention. "In September 1991 we signed a home security contract with a company called Emergency Networks," writes Protection One account number 11472842, whom I'll Mrs. Eleven for short. "Protection One is the third or fourth company that has purchased our contract since we signed up. We have paid a fortune over these 15 years to this company for the service, and the equipment was never even updated."
In April of this year, Mr. and Mrs. Eleven sold their home. "We now live in a motor home and are traveling the country, so we own no property that needs protecting," Mrs. Eleven wrote. "The new owners of our home looked into continuing with Protection One but decided they did want to use such an old, outdated system. I do not blame them one bit. So in early April, after they made that decision, I called Protection One and told them we had to cancel our service."
As Mrs. Eleven had already paid the bill covering the service through the end of April, and since Protection One didn't want its 15-year-old equipment back, she assumed that was the end of it. But it was just the beginning. A few weeks later she received a notice that he cancellation was not official until she put it in writing, so she did. She was then told she was supposed to have given 90 days notice, which hardly seemed fair to her, particularly she couldn't before the new owners of the home decided if they wanted to keep the service themselves. But when Protection One sent her a bill for $137 - essentially five months of service -- she was really upset.
"Since we are now totally living off Social Security, this is quite a bit of money for us," Mrs. Eleven wrote. "I told them that I did not think that I owed it, but they insisted and sent me a copy of the contract that we had signed with Emergency Networks. It says that after the initial three-year period the contract renews 'year to year thereafter unless either party gives written notice of cancellation to the other party 60 days prior to the initial or renewal term.' So they want us to pay through September."
In other words, because the contract renews annually, after being good customers for 14-and-a-half years, Mr. and Mrs. Eleven were being told by Protection One to pay up for the last half of their fifteenth year or else. In fact, you could say that their timing was actually pretty good -- if they had sold the house earlier in the year, they would just have owed more by Protection One's lights. And if they were selling the house now in August, Protection One could insist they owe for all of next year as well, since it would be less than 60 days prior to the September renewal.
Believe me, that seems to be what most of the security firms do when they think they can get away with it. But when Mrs. Eleven first wrote me, I was somewhat hopeful because I'd just heard from another Protection One customer who had gotten a satisfactory resolution to his evergreen situation after writing to the company's customer relations officials. So I suggested Mrs. Eleven try that approach, which she did. Ultimately, they wrote her back offering to split the difference on an adjusted balance. If she pays $60, they'll treat the account as paid in full.
On principle, of course, Mrs. Eleven feels she doesn't owe Protection One a penny, much less $60. And even that sum puts a pinch on a retiree's budget. On the other hand, Protection One still holds the trump card of being able to do damage to her credit rating. It hardly seems worthwhile to risk a credit history you've spent a lifetime building for $60.
So what do you think Mrs. Eleven should do? For that matter, what can any of us do about the money traps companies are setting for us in their fine print? Post your comments on my website or write me at Foster@gripe2ed.com.
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