When most people try to cancel their home security contract, this is what it looks like.
Carl is all set to move to a new city. He already closed on his new house and sold his old one. But his current home security system provider doesn’t offer service in the new city. He figured it’d be no problem to just cancel the contract. When he called up his provider, he ended up in a maze of clauses within his contract that resulted in him owing over $500 in cancellation fees.
We don’t want you to end up like Carl. So, we put together a complete guide on canceling your home security contract that covers the following topics:
What Is a Home Security Contract?
A home security contract is the formal agreement between you and a home security company. This legally binding contract outlines the specifics of your home security system and all associated security services provided by your contractor.
For “no-contract” home security services with a month-to-month subscription, your contract takes the form of invoices, work orders, terms and conditions, purchase orders, or similar documents. But if it has terms and requires your signature, it’s a contract.
Every contract must contain:
- Legal names of all parties involved
- Date of purchase
- Contract length
- Pricing details
- Provisions for if a party defaults
>> Read More: Best No-Contract Home Security Systems in 2024
The Evolution of Home Security Contracts
In the home security industry, contracts used to be rare. Most companies used to offer home security equipment at a flat rate only, with some offering professional installation services. But a lack of video streaming technology and internet infrastructure meant monitored home security systems required in-house security personnel. This made the service too expensive for an average household.
Modern video streaming capabilities allow home security providers to remotely monitor your video footage at reasonable prices. This significantly cuts down on the recurring overhead associated with monitoring services. To tap into this potential, home security companies started offering monitoring contracts with their home security systems.
Taking this a step further, many started offsetting the initial cost of the home security system by working with investors and using the monitoring contracts for collateral. Now, customers can acquire a complete home security system for an affordable monthly fee without any large upfront costs.
>> Check Out: The Most Affordable Home Security Systems
How to Cancel Your Home Security Contract: Step-by-Step
Figuring out how to cancel your home security contract can make you feel like pulling out your hair. Oftentimes customer service reps send you on a wild goose chase filled with broken links, inconsistent email addresses, and confusing instructions. So, here’s a step-by-step process to help you understand your contract’s criteria and then cancel the contract.
Step 1: Understand your contract.
Before you can start canceling your home security contract, you need to get your hands on it and read it thoroughly. Look for sections related to termination and automatic renewal. Highlighting any relevant information or jotting down important points in a separate document can help you fully understand the language of your contract.
Every home security contract includes at least a few conditions that allow you to terminate without penalty. These can include:
- If your security company fails to deliver services or equipment detailed within the contract
- If there are consistent malfunctions with the security system
- If the security features are outdated
- If you relocate to a location not serviced by the company
- If the contract was signed within the last three days under the Federal Trade Commission’s three-day “cooling off” period
- If you’re still within the company’s trial period
Step 2: Check for auto-renewal clauses.
Contracts can sometimes be tricky, with automatic renewals hiding in the fine print. If your contract includes such a clause, make sure you give notice of cancellation before the contract expires and an auto-renewal begins.
Pro Tip: Always keep a copy of your signed contract. If you can’t find your copy, your home security provider must provide you with the executed contract.
Step 3: Gather information for your termination letter.
If you can’t reach your provider or if it requires more than a call to cancel, you’ll need to write a termination letter. This letter acts as your formal request to end the contract. Some companies require receipt of a termination letter at least three months before the contract’s end date to prevent an automatic renewal.
Before you start writing your termination letter, you’ll want to gather some information, including:
- Your contract or service number
- The contract’s expiration date
- The desired termination date
- Your reason for canceling
- All supporting documentation and proof of claims
Step 4: Write your termination letter.
Creating your termination letter doesn’t need to be a daunting task. Just follow this eight-step guide to write a customized termination letter based on the JotForm template for canceling your home security contract:1
- Use a standard business letter format. Your name, full mailing address, and the date should appear at the top. Ensure the recipient’s address matches what’s stated in the contract.
- State your intent to cancel the contract. Include your account number, the desired termination date, and the relevant contract clause permitting termination.
- Provide your reason for termination. If it’s not specified in the contract, you might not need to include your reason for termination. But for cancellations due to the provider not complying with the contract, you need to include your reason for termination along with supplementary documentation of your claims. When writing your reason for termination, keep it calm and professional.
- Address any fees and outstanding balances. List any fees or outstanding balances you expect to pay, or request a final bill that includes all fees and outstanding balances.
- Thank the company for its support. A positive tone maintains professionalism and keeps the door open for future interactions if necessary.
- Sign the letter. Your printed and signed name should be at the bottom. If you’re acting on behalf of a company, also include your title.
- List any enclosures or attachments. Any documents that support claims you make within your termination letter or checks attached should be listed at the bottom of the letter. This ensures your recipient receives all supporting documentation.
- CC anyone else. If a copy of the letter is being sent to your lawyer or superior, their names should be included on the CC line.
Pro Tip: When sending your termination letter, use certified mail with a signature requested so you have proof that your home security service provider received the letter.
Step 5: Confirm your cancellation.
Once your provider receives your request to cancel your contract, request a written confirmation of your cancellation from it. This protects you if it has any mishandling of paperwork that results in your account remaining open.
Avoiding Cancellation and Early-Termination Fees
Cancellation and early-termination fees can quickly add up. It’s not uncommon for a provider to impose a fee of 50 to 75 percent of the remaining contract value as its early-termination fee. ADT’s cancellation policy involves 75 percent of the remaining contract value. This means if you pay $80 per month for home security and have seven months left on your contract, you’re looking at somewhere between $280 to $420 just to cancel your contract.
You might also owe fees related to removing the equipment from your house. For example, Vivint’s cancellation policy includes a fee of $300 or $150 depending on the remaining length of your contract on top of your remaining equipment balance.
So, what can you do to avoid these hefty fees?
Relocate Your Monitored Security System
Most home security companies let you take your monitored security system with you when you move. But they’ll usually charge a moving and installation fee for bringing your equipment over to your new location. These fees are typically between $25 and $99.
If your current company doesn’t provide service to your new location, you might be able to cancel without any charges. Since it can’t provide the service you’re paying for, most companies will let you cancel.
>> Read More: Moving With an ADT Security System & Contract
Transfer Your Home Security Contract
One surefire way to get out of your home security contract is to transfer it to someone else. More often than not, this involves selling your contract with your house if you’re moving. But you can also transfer your contract to a friend or family member that lives nearby.
Usually, transferring your contract doesn’t involve any fees or penalties. The person you transfer the contract to simply takes over the remaining portion of the contract, giving them the benefits of a long-term contract without the commitment.
Try a New Monitoring Provider
If you want to switch providers due to dissatisfaction with your current service, the company you switch to might pay for your cancellation and early-termination fees. For example, you can offset your early-termination fees by switching to a Vivint home security system. The company offers a $100 discount for contacting its SmartHome Consultants if you message them about it in the live chat window.
To find out if Frontpoint Security offered any way to reduce your early-termination fees, we chatted with one of its customer service agents, Nieme. She told us that Frontpoint can work with you to build a package that includes multiple months of free service to offset the fees from transferring to the company.
Did You Know? You can avoid the contracts altogether by choosing a no-monthly-fee home security system. Check out our guide to the best no-monthly-fee home security systems in 2024 to find one that works for you.
Leverage the Servicemembers Civil Relief Act
Any National Guard working full time, reserve members, and service members activated under Title 10 who receive Permanent Change of Station (PCS) orders can cancel their home security contract without fees.2 To exercise this right, you need to send a written notice of your intent to cancel with a copy of your PCS orders attached.
Final Words on Canceling Your Home Security Contract
When you first try to cancel your home security service and look at your contract, it can seem like a labyrinth without a map. So, we created the only map (this guide!) you need to navigate your way out without paying hefty cancellation fees. With a bit of patience and some organization, you can always get out of your home security contract.
Remember, the devil is in the details. Make sure to thoroughly review your contract to fully understand your obligations for canceling. You might need to give up to three months’ notice to prevent an auto-renewal or get your new security provider to cover some of your cancellation fees. Either way, paying attention to the details and planning your “escape” is the only way to reliably cancel a home security contract.