SimpliSafe Violating California, Florida, and Texas Licensing Laws

By Dan Gelinas, Published Aug 14, 2018, 09:58am EDT

IPVM has verified that DIY security system provider SimpliSafe, founded in 2006 and acquired in June of 2018 at a billion dollar valuation, is violating alarm licensing laws in California, Florida, and Texas.

In this note we:

  • Explain how state licensing laws work
  • Show how SimpliSafe is violating these laws
  • Examine how this works in California, Florida, and Texas
  • Contrast to other US states

Moreover, in response to IPVM's investigation, SimpliSafe has admitted that they do require licenses and now plan to obtain them, many years after they started selling alarm systems.

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*******, ** ******** **** these ******' ********* **** SimplisSafe **** **** ***** own ******* ** **** systems ** ***** ******.

California ********* ******

************* ******** *** *********** Code****** ** ******* ****.*:

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Florida ********* ******

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Texas ********* ******

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********* ****** **** ********* penalties ******* ** ** a ****** **** * years ** ******. ********* ***** ******* ***.***, section (*), ** ******* ***** ******* ** a *****-****** ***********:

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** **********, *****,** *** *********** ****, does *** *******************, *** **** **** more ********* *****:

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Ring ********** - ******** ** ***** ******

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Consultant ********* ******** ** ****

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*** *******, ** *****, the *********** **** **** in ******* ****.*** **** anyone ********** ** ** a ******** ********** **** have * ******* ** do **:

********* ******* ***** ******** ************* ******* **** "********" design *** "*******" ***** systems ******* *********:

**** *** *** ******** the ***** *** '******** consultants' ****** ***** ******.

*ther ***** ********* **********

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screenshot 15

SimpliSafe ****** ** ******** ** ****

** ******** ** ****'* investigation, ********** ******** **** need ** **** **** licenses ** **********, ******* and *****:

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Comments (43)

Dan, excellent reporting!

Two thoughts:

  • This shows the power of the press to motivate companies to do the right thing.
  • If you have ideas for stories like this where you believe a company is violating the law or raising serious ethical concerns, let us know. Contact Dan at dan@ipvm.com

Thank you, John! Please, IPVM users, reach out to me with any leads and I'll look into it. Stay tuned!

In my view, this is the most important and valuable service IPVM provides. There was little to nothing before to keep the industry honest.

This is crazy, what good is a law if its not enforced.

The Government NEEDS their control and money!

Like immigration laws? :D

 

We asked the Florida Board about how they police compliance. We got a response this morning:

Complaints against the regulated professionals or professions may be filed with Complaints Unit in Tallahassee or any Regional Office. A complaint may be filed online, or by a complaint form and will be forwarded to one of our Regional offices for Investigation. 

It's up to you guys in the field. Local alarm integrators, as I said in the story, are usually very concerned with being in compliance with local and state codes and laws. If you see something that you think is a violation, report it.

Perhaps if you make weekly posts about this topic you could probably get simpisafe banned from these states? :)

Comcast is getting away with the installation of systems in MA, and I am sure Simplisafe is too, installing companies and all technicians (excluding Apprentices) have to be licensed and have a Public Safety License (company and ALL employees) to install systems but not Comcast or Simplisafe are required!

To me this is new ground in the Alarm industry. When these laws were written the idea of a "Do it Yourself" alarm system wasn't even a thought. The states with some of the most restrictive policies in place do so that the installing company should know what they are doing. In Oklahoma for instance you have to be NBFAA level one at least maybe level two or this is what it was in the past. In order to get that certification you had to go through a training class which to someone not familiar with the industry teaches quite a bit. To me it was a breeze as I had been installing systems for quite some time before certifying but others in the class got a wealth of information. Not to say some states may be more about the money but most aren't.


From what I understand now in Oklahoma you have to work under a manager for such and such period of time before you can go out on your own and install on your own. Its almost like a journeyman. Its actually over-restrictive IMO. Im curious if simplisafe has a license in Oklahoma.

You say it's over restrictive but think about it. Anyone can pass a test but that doesn't mean they know what they are doing. If you have to work under a manager or someone with experience for a set period of time then you learn how to install security systems correctly. I know a lot of times these days techs get hired, they get a set of tools, a box of parts and a 10 minute run down of how it should go together. They then go out and try and install in a house and end up causing damage to said house or didn't install the equipment properly now the customer get plagued with false alarms. Having been in this industry for over 25 years I have seen it all. This is no different than a plumber or electrician. Would you want someone to come out and attempt to fix your plumbing and or electrical and not know what they are doing? Another reason for this in Oklahoma is also the fire portion of the security industry. Even in residential there are codes about where smoke detectors can and cannot go. It was ingrained into me that if you put in a fire system you better do it right or don't do it at all. If you didn't do it right then you are putting someone's life in danger if the fire detection system didn't work properly due to improper installation methods. Now obviously with all the wireless technology installations are much easier now than a full blown hard wired system but there still can be mistakes made.

And in Jersey you still can’t pump your own gas.  This is the equivalent of taxi companies fighting Uber.

'CCTV'/ Alarm licensing and it's often significant deviations from state to state is essentially a joke in my opinion. Sure, we are licensed simply to avoid getting fined and or shut down but, I have yet to see where the supposed value trickles down to the customer.

We focus almost exclusively on integrated network video solutions and the testing required for Qualifying Agent status does little to address the current technology set or even acknowledge edge devices/ IoT solutions. Licensing, as I have come to view it in the state of TN, is a sorry means to protect the legacy burglar alarm cartel and limit competition in the space.

Advancements in technology and presenting its respective value to the market place will always be of greater value than licensing under the guise of consumer protection and dated standards.

I agree, I think the same thing when I get my teeth work on or my electrical fixed. Why do I have to spend years and gobs of money for an expensive piece of paper to work on peoples teeth? Why do I need a license when YouTube teaches me everything I need to know to fix someone's electrical system?

So I guess the question is, "is it worth it?" Trying to get the legislation changed so that it is more open to other players and not just the "legacy burglar alarm cartel" you mention? Or is SimpliSafe an example of the fact that no one cares enough to police it, report it, change it, etc.?

The chat above with Dave stating he is a "security consultant" is possibly crossing the line.  Will SimpliSafe come to my home or business and install or service my system?  When I sign-up for monitoring, who bills me, SimpliSafe or COPS?  I'm not defending SimpliSafe but how is this different from a local security distributor selling a kitted security system or video NVR/camera package?

If you go to YouTube and look at some of the commercials, you can see that SimpliSafe brands the monitoring from COPS as SimpliSafe's award-winning monitoring service, but then in emails they admit it's COPS. Not sure re: billing. They DO offer "professional" installation. We're investigating that as well.

Quickest solution is for Simplisafe to hire Jeffrey D. Zwirn, CPP, ETC...

He hold more licenses than there are states in the union.

I am honestly surprised he has not weighed in yet.  This seems like one time he could be useful as an authority.

Well then this isn't limited to Simpli Safe is it? What about Best Buy? They are selling the Ring security system in the store. I am sure there is a long list of retailers selling a DIY solution in their stores.

Some states do provide exemptions for boxed systems sold in retail stores like Best Buy. The question becomes, does the Geek Squad need to be licensed since they're coming into your home and setting the system up?

Absolutely. That is doing business "on premise". 

Jay,

   I disagree with your comment.  Best Buy would not need a license to sell the system.  ADI and Triad sell thousands of systems, they do not need the license as they are a distributor and have no agreement with the end user..  The provider does need a license.  In your example, Ring would need the proper licenses which they appear to have.  Best Buy is not a provider, they are merely one conduit for distribution. Just like Amazon.com and Costco do not need a license for selling the system.  Hope this helps.

Well, I guess we can agree to disagree.

 

Some of the codes in the OP are pretty clear. They say SELL or install, etc. There is no exclusion or clause that says a company can resell a product based on the manufacturer being licensed. The whole point of being licensed is to ensure the seller has the knowledge to provide a sound solution.

 

I would think anyone selling Ring security products would need a license according to the codes listed above unless there is a specific exclusion somewhere.

 

As far as ADI/Anixter, they probably should have a license in certain states. There is nothing in the codes listed in THE OP that exclude wholesale distributors.

I know the GA Supreme Court has ruled that if the state legislators, wanted to include/exclude something in the law, they knew how to make those exclusions and that the law should be interpreted as written. I have to assume other states have the same opinion.

 

Here in GA I believe it is legal as the code here says low voltage contracting, and I do not think selling a box is contracting.

In NY and NJ you need a license. I spent a ton of time and money getting mine. now I have all these DYI companies and also places like Costco selling CCTV systems, security etc. They don't comply with any of the licensing law but they continue to sell their products and devalue my business.

So the state is going to go after every seller of DIY alarm systems? Radio shack, Fry's, etc?

When I opened the Las Vegas branch of ADI, the City told me that we would have to submit to the same licensing as an alarm company. ADI balked at this, of course, as we don't sell or install on premise. The City didn't care. When we pointed out that Radio Shack sold actual Pro (Ademco) panels, the City told us, thinking we were some small business, that they weren't interested in pursuing Radio Shack, and that we still needed this license. ADI corporate took offense to this, and the lawyers started sending letters the way they do, and once the City realized that ADI (Pittway Corp) wasn't a small-time business that would be bullied, the licensing requirement magically went away. As far as California goes, the law clearly states "on premise". BSIS might interpret that as meaning any sales whatsoever, but they're going to run into issues going after large big-box resellers.

Right from today's ad - 

Regarding the issue of licensing for "Security Consultants", I don't know about Tennessee, but Texas has an exception for licensed engineers.  A licensed PE can act as a "Private Security Consulting Firm" and design security systems without being specifically licensed as such.

SUBCHAPTER N. EXCEPTIONS

  • 1702.324. CERTAIN OCCUPATIONS. 

(b)  This chapter does not apply to:                                          

(6)  a licensed engineer practicing engineering or

directly supervising engineering practice under Chapter 1001,

including forensic analysis, burglar alarm system engineering, and

necessary data collection;

 

Note that this only covers a licensed engineer "practicing engineering".  I would interpret that to mean that they could recommend and/or specify products, design systems, etc. but would not extend to sales/installation of equipment or monitoring of those systems.

 

I'd be really interested in knowing which other states require licensing for security consultants.  Until I read this and found out about Tennessee, the only one I had found was Texas.

 

Update:

I question whether the Tennessee code that is quoted really requires licensing for someone acting exclusively as a consultant.  It reads:

No person shall advise anyone as to the need, quantity or quality of alarm systems and sell the systems unless certified, licensed or registered under this part. (emphasis added)

I'm not a lawyer but in my limited experience, this being a legal document, that word "and" means something very specific.  I would interpret that to mean that one needs to be certified, licenses or registered only if they advise and sell.  If licensing was required just for consulting, I would think it would read:

No person shall advise anyone as to the need, quantity or quality of alarm systems or sell the systems unless certified, licensed or registered under this part.

Any lawyers out there that could weigh in?

Please see the forensic investigation which I performed on Simpli-Safe Product

https://www.securitysales.com/fire-intrusion/simplisafe_diy_security_system_investigation_yields_disturbing_results/

Jeffrey Zwirn, President, IDS Research and Development, Inc. 

Jeff-

Informative article.  Did the wireless smoke and CO detectors have built-in sounders?

Yes they do Bryan. However the control set of the Siimpi-Safe product is not listed by an NRTL.  As you know, in the professional alarm industry, you cannot purchase a control panel set nor does any recognized manufacturer make a control panel set that is not required to comply with UL 1023 and UL 985 respectively.

Unfortunately, it seems that there is going to have to be a loss to property and/or serious personal injury or death, and maybe then AHJ's and lawyers will take action and not allow any company to act as Simpli Safe does. 

Jeffrey D. Zwirn, President, IDS Research and Development, Inc.  

"Dave" is the generic name Simplisafe uses to respond to customers' emails and to send out marketing emails.  There might be a person named "Dave" there but that would be a coincidence.

This news makes me wonder: Since these systems are self-installed by the user, does the homeowner have to get a license as an "installer"?  If so, does that make me an outlaw?

Some states had exceptions for people who installed at their own home or other premises, not for money. 

John,

is there any chance that Simplisafe will actually have to pay fines for past sales or be barred from selling until a license is granted? In States where failure to have a license is a crime, does past commission of a crime block them from obtaining a license for a time period? Most small companies would be sweating these questions.

 

Although they say they are looking into getting licensed, I would wager that their lawyers are actually gathering whatever they need to fight the State requiring it.

The question I have is about the consumer installing the system in his/her home. Per the law, they are an "Installer" and must be licensed to install security systems otherwise they should be fined too. 

Has any state addressed this?

In Texas, there is an exception in the code for a homeowner doing work on their own home.

SUBCHAPTER N. EXCEPTIONS

  • 1702.324. CERTAIN OCCUPATIONS.

(b)  This chapter does not apply to:

(12)  a person who on the person's own property or on

property owned or managed by the person's employer:

(A)  installs, changes, or repairs a mechanical

security device;

(B)  repairs an electronic security device; or

(C)  cuts or makes a key for a security device

 

Note that this does not exempt them from code requirements or permit requirements.  The homeowner would still need to apply for any required permits and meet all code requirements.  It just exempts them from the licensing requirement if they are doing work on the house that they own.

I would think that other states probably have something similar.

 

You are absolutely correct. These exemptions are referred to as "owner/builder" and extend to all aspects of construction. 

I am a bit surprised that despite Simplisafe doing it’s best to undercut pricing for monitoring by traditional alarm companies, and eliminate their installation income; no one seems to mention the possibility of using their flagrant disregard for State licensing as a tool to slow their inroads.

 

After reading these comments it seems that there is some confusion by some over the types of licenses and when they apply. Typically states separate into three categories: monitoring, installation, and sales. Most states care about installation only and often it is for commercial/public buildings (not homes). Many care about monitoring. Only a few care about selling. In the states like those mentioned here in the article, even if you do not install or monitor the system, you still must be licensed. If you are only selling, the requirements are usually less demanding than the installation requirements. The DIY piece makes it more complicated but since they are offering professional services (monitoring, design, consulting), it certainly seems to cross the line from simple DIY retail. 

Also, nobody mentioned it but last I checked Louisiana was even harder; have to have a brick and motor office with licensed person living in state (or within normal commuting distance).

 

Typically states separate into three categories: monitoring, installation, and sales.

Agreed, I would be interested in a basic rundown of what each state entails. Blog request.

By the way, I did call my city's permit office and was told I do not need a permit to install an alarm system.  This was in Signal Hill, CA.

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