JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced a $76,000 settlement Friday with a Utah-based home alarm system company.
Under terms of the settlement, Pinnacle Security will provide Missouri customers who were misled about Pinnacle's relationship with other security companies, the cost of its services or its cancelation policy with a total of $46,000 in refunds.
Pinnacle also will pay $12,500 to the Missouri Merchandising Practices Revolving Fund and $17,500 in civil penalties to theta state.
Additionally, Pinnacle is required to reform its sales practices to ensure that consumers understand important terms in its contract before purchasing, including the company with which they are contracting, the service's monthly price, the contract's duration and any restrictions on cancellation. Pinnacle is also obligated by the settlement to more closely monitor its door-to-door sales representatives.
"A fundamental principle of Missouri law is that sellers cannot mislead consumers," Koster said. "My office has not tolerated and will not tolerate companies that deceive consumers."
The settlement resolves a May lawsuit that alleged that Pinnacle induced consumers to purchase its service by misrepresenting that it was associated with consumers' current alarm company and that the consumer would receive free services when the services were not, in fact, free. The suit also alleged that consumers were advised that they could cancel at any time when they actually had to pay the entire 39 month contract if they did not cancel within three days.
Pinnacle, in addition to pay $46,000 in restitution, will also pay refunds to consumers who file a new complaint within the next four months and who provide documentation showing that they were induced to enter a contract with the defendant through unfair or deceptive practices.