SALT LAKE CITY — Home security company ADT announced Thursday that Lehi-based competitor Vivint Smart Home agreed to pay $10 million to settle a lawsuit alleging deceptive sales practices.
ADT, which has launched multiple legal actions to protect its brand integrity, said the Vivint agreement is its largest deceptive sales settlement to date.
“ADT is a brand trusted five times more than any other security company," said P. Gray Finney, the company's chief legal officer. "When others misuse that trust to prey on innocent consumers, it is despicable. We hope these lawsuits and ensuing settlements send a strong and clear message that deceptive sales practices must end.
“Not only does it harm our customers, it also harms the value of having a trained security professional in the home, which is how most reputable security companies operate their businesses,” Finney said.
A Vivint Smart Home spokeswoman declined to comment on the settlement agreement.
Vivint settled a trio of other claims in 2017 in Texas, Wyoming and Pennsylvania, which included allegations of misleading practices. Monetary penalties included a $210,000 settlement with Texas, a $100,000 deal with Wyoming and an agreement to pay restitution to select customers in Pennsylvania.
Vivint began life in 1999 as APX Alarm Systems, a company co-founded by former BYU student Todd Pedersen. In 2011, the company rebranded as Vivint and expanded into the emerging "smart home" technology market.
Vivint specializes in smart home monitoring and products like thermostats, security/doorbell cameras and other devices, as well as a mobile phone app that syncs with a proprietary operating platform.
With 4,000 employees in Utah, Vivint is the largest tech employer in the state and has 11,000 employees worldwide. The company reported revenues in excess of $750 million last year and said it currently has 1.2 million active customers.
While once relying primarily on door-to-door sales to drive growth, the company has recently expanded into the brick-and-mortar retail market and is close to completing a rollout in partnership with Best Buy in more than 400 of the computer electronic giant's stores across the country.14 comments on this story
A number of tech news outlets have recently reported Vivint products will also become available at about 80 U.S. stores operated by cellphone and internet service provider Sprint.
Last September, the Wall Street Journal reported that Vivint Smart Home's owner was seeking a buyer for the company.
New York City-based Blackstone Group, one of the largest private equity firms in the world with more than $370 billion in assets under management, paid $2 billion for Vivint in 2012. Sources told the Journal that Vivint's valuation, including debt, could top $6 billion, tripling what Blackstone paid for the company just five years ago.