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April 3, 2013 / Corina Valderrama

ADT Security Services Sued Over Early Termination Fees

A class action lawsuit was filed in California federal court against ADT Security Services (“ADT”) on behalf of all consumers who purchased ADT home monitoring services.  The lawsuit focuses on the termination fees that consumers were charged after cancelling their ADT subscription.  According to the complaint, ADT’s early termination fees amount to unlawful penalties that are used as anti-competitive devices and do not actually compensate ADT for any true costs of breach.

The early termination fees are charged even under circumstances which do not justify the fees.  For example, the fees are charged when ADT has failed to perform the very services that form the basis of ADT’s obligation.  The fees are also charged to customers who contracted with ADT to simply monitor a system that was previously installed, requiring no equipment to be installed and resulting in a windfall to ADT upon termination.

The class is suing for unfair business practices as well as violation of California consumer protection statutes.  According to California’s Business and Professions Code, any person who engages, has engaged, or proposed to engage in unfair competition shall be liable for a civil penalty.  Unfair competition is defined as unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.

If you or someone you know has been a victim of similar termination fees, please contact Khorrami, LLP for a private consultation.

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