A North Salt Lake businessman has agreed to pay $3 million to settle a lawsuit alleging he lured away customers of ADT's home security and automation services by getting them to accept phony "upgrades" to their existing systems.
Adam Schanz and his business, Alder Holdings LLC, agreed to settle a lawsuit filed in federal court in Florida by Boca Raton-based ADT. But the two sides are disputing some of the details in the settlement and ADT is asking the judge to enforce general provisions they had previously agreed to fulfill.
The lawsuit alleged that Schanz created a company with the name Alarm Protection Technology and then used the APT abbreviation to confuse customers about who his sales teams were representing. The sales teams sold alarm systems to ADT's customers "by misleading them to believe they were receiving an 'upgrade' of their existing ADT alarm systems," the lawsuit alleges.
As part of a settlement, ADT attorneys said Schanz agreed to an injunction prohibiting the misconduct. But ADT says Schanz and his companies have been stalling on the final terms of the injunction and alleges the same types of sales tactics have continued even after the settlement was reached.
Utah-based Vivint Smart Home also is suing Schanz's companies, alleging the same type of misrepresentations. That action remains pending in federal court in Salt Lake City.