Contract nightmares: How to escape one-sided service agreements

(WSPA) – When you are signing a contract for a product or service, what you don’t read can harm you.

In this 7NEWS Consumer Exclusive, a warning about auto-renewal policies that can lock you into a decade of payments, even if you don’t want the service.

The quiet life for Herbert McCoy, in Greenwood, was anything but, after 5 years locked into an agreement with a home security company that he says would not let up.

“They just kept calling aggravating, I bet they would call 50 times in a week,” Herbert said.

McCoy said Alder Home Security failed to protect him for the last 3 years of payments after the system broke. So he told them over the phone he would not renew and then?

“They told me I couldn’t get out of this contract.”

He had fulfilled his original 5-year contract, so he told his bank to block all drafts, and that’s when the debt collection calls started.

Dangers of auto-renewal

The problem: Since the contract had a built-in auto-renewal policy, it signed him up for another 5 years and McCoy said Alder refused to cancel it over the phone.  He had never been given a paper copy so he didn’t know he had to cancel in writing.

McCoy’s son-in-law, Adrian Little, reached out to 7NEWS after tracking down what turned out to be a 13-page contract through the Better Business Bureau.

“We did not sign this, this is not my father-in-law’s signature in either of those places,” Little said pointing to the contract.

“We had not seen the contract until a few weeks ago, so we had not signed the contract either,” he added.

“Like I told them, I said, that’s not my signature,” McCoy confirmed.

He then showed 7NEWS the “real McCoy” on his driver’s license.  When he compared it to the contract signature, McCoy said it looked nothing like the other.

Attorney Rodney Pillsbury, in Greenville, said forgery makes any contract void, but even without that possibility, he said the document raises red flags.

“The disparity, and the terms and the application, it is so one-sided in favor of the corporation,” Pillsbury said.

He pointed to examples like the “60-month renewal period” with early termination charges of “90% of all monies due for the remaining term.”

It would have added up to more than $3,000 for McCoy, but he didn’t have to pay it because 7NEWS Here to Help got Alder to cancel the contract.

“I’d a still be being harassed by them people if you hadn’t come here and checked into this,” McCoy said.

Switched without consent

Just when the quiet life was returning and the phone calls had stopped came a heart-stopping notice in the mail.

“It was one of those cases where your jaw really does sort of hit the floor when you read something like this,” Little said.

The letter from Alder said it had “exciting” news to share, informing McCoy his account had been transferred to ADT.  And soon after, the bills started to arrive.

“It was like being rescued from a sinking boat and finding the helicopter you’d been rescued in was going down into the sea and you’re going to need to be rescued again,” Little said.

Alder’s response

So what does Alder have to say?

The company sent us a video showing what appeared to be McCoy agreeing to the initial service agreement while speaking with a virtual assistant who said “Did you sign and do you fully understand the terms and conditions in your agreement?”

McCoy and his family told 7NEWS they never recall seeing that video, and that McCoy was never made clear about the terms and conditions.

Alder also sent a full statement that read, in part:  “For the safety of our customers, Alder requires a formal written notice of cancellation, either via email or letter. Our records indicate that Alder attempted to contact Mr. McCoy on at least four occasions to notify him that we were awaiting his written cancellation request.”

The statement also addressed the transfer of service calling the contract “inadvertently assigned to ADT.”

Pattern of complaints

More than 1,000 Better Business Bureau complaints show a pattern of that unexpected transfer leaving customers locked into new service they didn’t approve and stuck with hefty bills.

7NEWS reached out to ADT, and that service was canceled, too, with no charge.  However, many of those BBB complaints show ADT did not cancel the service.

How to fight these types of contracts

Whether or not you have a news team on your side, you can fight these types of contracts in small claims court. The cost is minimal since you don’t need an attorney to represent you, but you would be wise to consult with one about your strongest arguments.

Civil claims in Magistrate Courts in South Carolina must not exceed $7,500 in damages.

The first step is to file this complaint form , which you can also do at the courthouse where the clerk of court may be able to give you some guidance on filling it out, but no legal advice.  The form information required includes:

• Parties’ names and addresses
• Brief description of the claim
• The amount of money (or other relief) the plaintiff is seeking
• Any supporting document can be attached

There will be a filing fee, but if can’t afford it, you can file a motion to have it waived.

McCoy is once again enjoying the peaceful life, and if any stranger comes round, he said, “I will never buy nothing else from a door salesman.  They can come in here selling Bibles, I ain’t buying one.”

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