Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY — Imagine making a contract with a company and to get out of it, all you have to do is contact the company. But, surprise — there's no way to reach the company. Is there a way to legally cancel when the company has no contacts?
A Utah woman, Claudia Udy, made a contract with an alarm company. The alarm system has helped protect her home for the past five years. A door-to-door salesman with Platinum Protection sold her on it just as her family moved into their new house built in a new neighborhood.
“We thought we needed it and they were one of the first ones who approached us,” she explained.
There wasn’t too much trouble, Udy said, until her five-year contract with the Utah County-based company expired.
“Once you meet the full term of the contract, you don’t have to do month-to-month or anything. You can cancel after that point,” she said.
But Udy can't get a hold of the company to actually cancel her contract. There's no physical or mailing address listed anywhere. She has called Platinum Protection several times. The automated calling system doesn't even give an option of leaving a voicemail, let alone talking to a human being. It does refer callers to an email address.
“But when we sent an email, we have never received a response,” Udy said.
The no response doesn't mean no billing, Udy said. Every month, the security company automatically withdrew $47 from her bank account until January, when Udy said she told her bank to shut off the withdrawal.
“Sometimes if you put a stop payment on your account, they’ll get a hold of you,” she said.
It worked. Platinum Protection didn't waste too much time contacting Udy after the stop payment. It sent her a letter demanding payment for January. But does she really owe for that month or any month after she said she sent her first cancellation notice?
Attorney Barry Scholl, an expert in business law, said, “There’s no fiduciary duty here because this is an arm’s length transaction between the customer and the company.”
Scholl has never talked or consulted with Udy or with anyone at the home security company. He said generally, while a company doesn't have a fiduciary duty to respond to phone calls or answer emails, it has to approach all agreements fairly and in good faith.
“If the company contract says that in order to cancel, the customer has to contact the company, and it’s impossible to contact the company, that would be very likely a violation of the duty of the good faith,” he said.
Scholl said unless an agreement or contract says otherwise, sending a letter of cancellation is enough. No need for a response. In this case, Udy sent emails because she said the company never gave her its mailing address. However, Scholl said the best bet is snail mail.
The gold standard of proof is to send a letter via certified mail, returned receipt requested.
“The gold standard of proof is to send a letter via certified mail, returned receipt requested,” he said, “because then the company has to prove it didn’t receive the notification.”
After several attempts by KSL to call Platinum Protection, one of our emails caught their attention. In their response, they told KSL Udy’s account was made inactive in January. But when we asked about those months from when she claims she sent her first cancellation letter to January, silence. KSL never got a response.
Scholl said those months are refundable, as long as the customer can prove he or she sent a cancellation letter within the contract's required timeline. He said that's why it's important with any contract to keep that proof, and maybe back it up with certified mail.