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Medical alarms Updated: 30 Aug 2011

Unfair terms

Frances and George Griffin signed-up for a Signature Security medical alarm in late 2009. But when they decided to cancel, they struck a problem. The company said they had a 36-month contract. If they wanted to end it, Frances and George would have to "buy out" the remaining 17 months. The bill: $1700.

Frances was shocked. She thought they'd be able to cancel at any time. It was only when she read the fine print that she discovered they were locked in for 3 years. She got in touch with us to find out what her rights were. We contacted ADT Security, the new owners of Signature, and the company agreed to waive the $1700.

The Griffins were pleased with ADT’s response. But we think they got a raw deal to begin with – there's no reason why medical alarm suppliers should tie customers to 3-year terms.

To add salt to the wound, it's often the taxpayer who foots the bill for these lengthy contracts. The majority of medical alarms are funded by the Ministry of Social Development through disability allowances. The ministry pays out almost $50 million a year for alarm subsidies (see Work and Income allowance).

Suppliers are required to have ministry approval if they're providing medical alarms to people eligible for a disability allowance. We think companies that put unfair terms in their contracts shouldn’t be on the ministry’s “approved” list.