Small Matter

Why This Attorney Sued Vivint In Wisconsin

Hannah Scott -

From 2007 to 2015, J.B. Van Hollen was Wisconsin's attorney general, and by 2008, his office had begun receiving dozens of complaints about an alarm service company called Vivint, Inc. Those complaints reported various fraudulent, deceptive, and unfair trade practices by Vivint, largely through the conduct of Vivint's door-to-door and telephone salespeople.

What must have stood out to Van Hollen were the patterns tying all of these complaints together: many of the alleged misrepresentations were virtually identical complaint-to-complaint. That was enough to prompt an investigation.

In the course of investigating these complaints, Van Hollen's office uncovered a sales training manual Vivint used to train each of Vivint's salespeople systematically; and, unfortunately for Vivint, to Van Hollen's office, many of the manual's directives seem to match up squarely with some of the sales practices consumers were complaining about.

For example, one of the stressors for Vivint salespeople seemed to be that, despite all of their efforts expended to make a given sale, the new customer was, by law, permitted to cancel the contract for a certain number of days after signing. This meant that all that salesperson's hard work could, in the end, not result in Vivint paying that salesperson a commission check. So, Vivint's sales training manual advised salespeople on how to deter customer cancellations: "Installing the security system within hours of when it is sold has proven to be a huge deterrent to customer cancellations." The subtext of this suggestion, although unwritten, was probably in line with one of the more common complaints the alarm service industry has always faced: once the alarm company cuts holes in your walls to install equipment, you face something of a dilemma when you decide to request cancellation but then discover that the alarm company is not going to repair the holes they cut in your wall; so, keeping the alarm equipment appears suddenly more attractive in the short-term, as it's the cheapest way at that moment to address the large holes in your wall.

Throughout Van Hollen's investigation, though, the complaints against Vivint apparently kept coming; and these complaints against Vivint seem to regularly be showing up elsewhere as well (in July 2021, the Milwaukee Journal Sentinel reported that, from July 2011 to July 2012, the Wisconsin Better Business Bureau received more complaints about Vivint than the BBB received about any other alarm company).

So, in September 2012, Van Hollen sued Vivint for...

  • Fraudulent Misrepresentations, in violation of Wis. Stat. § 100.18.
  • Failure to make all disclosures required by Wis. Admin. Code § ATCP 127.64, in violation of Wis. Stat. § 100.20.
  • Failure to make all disclosures required by Wis. Admin. Code § ATCP 127.72(4), in violation of Wis. Stat. § 100.20.
  • Violations of the Wisconsin Consumer Act.
  • Failure to make all disclosures required by Wis. Stat. §§ 422.301 and 422.303.
  • Violations of Wis. Stat. §§ 425.103, 425.104, and 425.105.
  • Violation of Wis. Stat. § 421.301.
  • Violation of Wis. Stat. § 426.201.
  • Misrepresenting customers' right to cancel, in violation of Wis. Admin. Code § ATCP 127.72(6) and Wis. Stat. § 100.20.
  • Misrepresenting the basis of the purportedly "promotional" offer, in violation of Wis. Admin. Code § ATCP 127.72(11) and Wis. Stat. § 100.20.
  • Violation of Wis. Admin. Code § ATCP 127.72(15) and Wis. Stat. § 100.20.
  • Violation of Wis. Admin. Code § ATCP 127.81 and Wis. Stat. § 100.20.
  • Violation of Wis. Admin. Code § ATCP 127.82 and Wis. Stat. § 100.52.
  • Violation of Wis. Stat. § 100.195.

...and, uh, that is the abbreviated version, as I omitted from the list above, for the sake of brevity, many of the court complaint's specific details (you can click here to request a full PDF copy of the court complaint filed against Vivint, though, if you have the time and appetite to read all 21 pages).

So, what happened with this case? In the end, Vivint settled the lawsuit, agreeing to cancel about $450,000 worth of ill-gotten contractual obligation on the part of Wisconsin consumers, and also agreeing to pay the state of Wisconsin about $65,000 in costs and penalties.