The Vivint controversy is a series of legal actions and settlements involving Vivint Smart Home, a Utah-based company that sells smart home technology and security systems, for allegedly using fraudulent and deceptive practices to obtain financing for its customers. The company has faced investigations and lawsuits from federal agencies, state attorneys general, competitors, and consumers, resulting in millions of dollars in penalties and damages.
The allegations against Vivint
According to various sources, Vivint has been accused of violating the Fair Credit Reporting Act (FCRA), the FTC Act, the Red Flags Rule, and other consumer protection laws by engaging in the following activities:
- Using a method called “white paging” to find unrelated people with similar names to the customers who failed the credit check, and using their credit reports to qualify the customers for financing without their consent or knowledge.
- Asking customers for the names of relatives or friends, and using their credit reports to qualify the customers for financing without their consent or knowledge.
- Adding co-signers to the accounts of customers who failed the credit check without their consent or knowledge.
- Impersonating customers or co-signers to make payments on their behalf, in order to qualify for larger commissions and bonuses.
- Failing to implement an identity theft prevention program, as required by the Red Flags Rule, to detect and prevent these fraudulent and deceptive practices.
- Selling false debts to debt buyers or collectors, who then harassed and sued the unsuspecting consumers whose identities were used by Vivint.
- Misrepresenting the terms and conditions of its contracts, such as the length, price, cancellation policy, and warranty coverage.
- Using high-pressure and aggressive sales tactics, such as lying, threatening, or refusing to leave the premises, to coerce consumers into signing contracts they did not want or understand.
- Installing defective or faulty equipment, or failing to provide adequate service or support, to its customers.
The consequences for Vivint
As a result of these allegations, Vivint has faced legal actions and settlements from various parties, including:
- The Federal Trade Commission (FTC), which reached a $20 million settlement with Vivint in April 2021, requiring the company to pay $15 million in consumer redress and $5 million in civil penalties, and to implement a comprehensive identity theft prevention program.
- The Department of Justice (DOJ), which reached a $3.2 million settlement with Vivint in January 2021, requiring the company to pay $1.4 million in restitution to the victims of its identity theft scheme, and $1.8 million in civil penalties, and to cooperate with the FTC’s investigation.
- The attorneys general of California, Illinois, Massachusetts, New Jersey, Ohio, and Pennsylvania, who filed a lawsuit against Vivint in December 2020, alleging that the company violated various state consumer protection laws, and seeking injunctive relief, restitution, civil penalties, and costs.
- The competitors of Vivint, such as ADT and Alder, who filed lawsuits against Vivint in 2019 and 2020, alleging that the company engaged in unfair competition, tortious interference, and false advertising, and seeking damages and injunctive relief .
- The consumers of Vivint, who filed class action lawsuits against Vivint in 2019 and 2020, alleging that the company breached its contracts, violated the FCRA, and committed fraud, and seeking damages and injunctive relief .
The implications for consumers
The Vivint controversy has exposed the potential risks and harms of using smart home technology and security systems, especially when they are sold and financed by unscrupulous companies. Consumers who are interested in purchasing or using these products should be aware of the following tips and precautions:
- Do your research before signing any contract or agreement with a smart home or security company. Check the company’s reputation, reviews, ratings, and complaints online and with the Better Business Bureau. Compare the prices, features, and services of different companies and products. Read the fine print and understand the terms and conditions of the contract, such as the length, price, cancellation policy, and warranty coverage.
- Be wary of any sales representative who uses high-pressure or aggressive sales tactics, such as lying, threatening, or refusing to leave the premises. Do not sign anything or give any personal information under duress or without your consent or knowledge. Ask for a copy of the contract and review it carefully before signing it. If you change your mind, exercise your right to cancel the contract within the specified period, usually three days.
- Protect your identity and credit information. Do not give out your Social Security number, date of birth, or other sensitive information to anyone who calls or visits you claiming to be from a smart home or security company. Do not let anyone access your credit report without your authorization. Monitor your credit reports regularly and report any suspicious or unauthorized activity to the credit bureaus and the FTC. If you are a victim of identity theft, follow the steps outlined by the FTC to recover your identity and dispute any false debts or charges.
- Report any problems or issues with your smart home or security system to the company and request a repair or replacement. If the company fails to provide adequate service or support, or if you experience any fraudulent or deceptive practices, file a complaint with the FTC, the DOJ, your state attorney general, or the Better Business Bureau. You may also consider joining or filing a lawsuit against the company, or seeking arbitration or mediation, if you have suffered any damages or losses.
The Vivint controversy is a serious and ongoing matter that affects the rights and interests of consumers, competitors, and regulators in the smart home and security industry. Vivint Smart Home, one of the largest and most prominent companies in the field, has been accused of using fraudulent and deceptive practices to obtain financing for its customers, resulting in millions of dollars in penalties and damages. Consumers who are interested in purchasing or using smart home technology and security systems should be aware of the potential risks and harms, and take the necessary steps to protect themselves and their identity.