I’m voting ‘No’ in the Referendum so that we can keep the HST in BC.

That will not shock anybody. I’ve been a vocal proponent for the HST since its introduction last year.

So vocal, in fact, that I was asked to co-chair the Smart Tax Alliance, which is the official ‘No’ side for the referendum. Acting as a co-chair has meant dozens & dozens of media interviews, more than a few radio debates and appearing in a television commercial.

I was also quoted in the HST Referendum Voters Guide that was sent to every British Columbia household by the Government.

As a result, I’ve had hundreds of people contact me over the past few months… lots of people letting me know they agree with me, lots of people saying they don’t, and plenty of undecided people with questions about what they had heard me say in the media. All in all, it’s been an interesting experience.

Now that we’re at the very end of the road on this issue, with the mail-in vote deadline of August 5th, 2011, I thought I’d answer the most common questions I have been asked about the HST and my involvement.

The most common questions that I’ve been asked are:

1. Why was the PST+GST system so bad for Provident? 

2. Why did I go public to try and drum up support for a tax? How did I get involved with the Smart Tax Alliance?

3. How has the HST helped improve Provident’s customer service (like I say in the commercial)?

4. How has the HST allowed Provident to create new jobs?

5. Has Provident lowered prices as a result of the HST savings?

6. What’s the deal with Bill VanderZalm?

7. What was it like being one of the public faces of the HST debate? How much hate mail did you receive?

Why was the PST + GST system so bad for Provident?

Under the old PST system, the government rules about how and when to apply the PST to alarm systems were incredibly complicated. In fact, they were so complicated that the government had a 15 page bulletin that attempted to explain how PST was to be applied to alarm system installation.

Being complicated isn’t a good thing, but it would be manageable. The real problem with the PST rules was that they were often contradictory… leaving huge decisions, with major financial implications, open to a wide range of opinion & application.

Over the course of the past 9 years, we had three PST audits. During each of those audits, the Auditors themselves disagreed with what the PST rules meant and how they were to be applied.

As a result, we went through lengthy appeals processes in each case in an effort to be treated fairly. Our last appeal ended up taking 5 1/2 years to work its way through the process. The net result was that we ended up spending the equivalent cost of having a full-time position in our accounting department that did nothing but work on government tax compliance issues… every single installation had to be reviewed to confirm what taxes got applied to which parts and in what circumstances labour would require PST (because even though PST was not supposed to be on labour, if labour was involved in installing a product that it was determined to be “PST-able” then it got taxed as well).

The other major costs involved in this were the fees we incurred with our external accountants to try and get clarity about what the PST rules were.

Beyond the hard cost, the PST confusion created a significant distraction in our company. We were forced to dedicate time, labour and money to fighting through the government bureaucracy in an effort to just get a straight answer as to how the PST should be applied.

By contrast, when the HST was implemented, we experienced an almost overnight change. There are far fewer exceptions and exemptions with the HST and we were able to take a process that used to take many hours each week to a process that now takes a few minutes each quarter.

I’ve since heard from many other small business owners who have had the same experience. Unfortunately, some are still having the same fight even though the PST has been gone for a year now.

Introduction

Why did I (and Provident) go public to try and drum up support for a tax? How did I get involved with the Smart Tax Alliance?

Last year, I got inspired to do something after listening to Bill Vanderzalm, all over the media, telling people that the HST was only good for big businesses and that everyone else would suffer. In particular, he talked a lot about how the HST hurt small business.

That concerned me a lot because, as a small business owner, I had seen first hand how unfair and expensive the PST system was. I had seen how the PST added significant hidden costs within our business and wasted valuable resources that our clients received no value from. I knew that going back to the PST/GST system would be a costly nightmare that would hurt our company, our employees and our customers. I had seen how the HST served to eliminate waste and allow us to focus more of our time, money and resources on our clients.

It was clear that the Government had done a terrible job implementing the HST, and Mr. Vanderzalm was taking full advantage of that. I thought what was missing were real stories, from real people, about how the HST was helping, not hurting, small business.

The only person talking about the HST was Mr. Vanderzalm and I knew that what he was saying about small business was not true.

I knew from speaking with many of my friends who owned their own businesses, that my experience was not unique.

I set up a website, www.SupportHST.ca … the idea was to create a page where small business owners could upload a quick video to tell their own story of how the HST had helped them. I filmed my own first…

A few friends of mine who run businesses in other industries filmed their own clips as well… Ken Sim from Nurse Next Door – a home healthcare company, Dwayne Stewart of Pacific Rim Services – a general contractor, Dave Notte from Wolfgang Commercial Painters and Chris Mobius from Garibaldi Glass Industries – a glass manufacturer, were amongst the first. Andy Latchford, COO of Cactus Club Restaurants submitted his video and was one of the first restauranteurs to go public saying that the HST was a good thing for our Province.

Although the original intent of the site was to highlight the stories of small business owners, I was contacted by other people that had also felt offended by Mr. VanderZalm’s HST rants and wanted their voices heard.

Chrystal Ocean, a low-income senior living on Vancouver Island, submitted a video sharing her experience of how the HST has helped put more money in her pocket. Click below to watch her story:

Similarly, Don Wilson, a retiree who has never owned a business, submitted a video explaining why he supports the HST as a consumer.

Shortly after launching the site, we had 21 videos posted. The site got a little bit of media attention, and myself, Dwayne Stewart and Ken Sim were guests on the Bill Good Show a couple of times to talk about what we were doing. 

In February or March, I was contacted by the Smart Tax Alliance who let me know that they were trying to get the same message across as I was, and had already brought about 40 major business & trade groups together (such as the Vancouver Board of Trade, Tourism BC, etc.) who represented more than 1 million BC employees/members.

It seemed to make a lot of sense to get involved with the Smart Tax Alliance and pool our efforts. I was asked to become a Co-Chair and act as one of a few media spokespeople.

How has the HST improved Provident’s customer service (like I say in the commercial)?

Once the HST came into effect, we were able to take the money we had been spending on PST administration and, instead, spend it on our customer service team. Immediately, we were able to add another full-time customer service position without any additional cost to the company.

As a small business that relies exclusively on word of mouth referrals, providing a better client experience has led to more referrals and more business. We’ve reduced our on-hold times and have been able to tackle pro-active customer service projects that we had not been able to get to in the past.

Under the old PST system, a portion of all of our clients fees that they were paying for security services had to cover our tax compliance costs. With the elimination of the need to administer the PST (which was by far the most complicated and time-consuming administration task) our clients are now getting more value for the same fees.

The HST has allowed us to focus more effort on customer service without increasing our costs or prices.

How has the HST allowed Provident to create new jobs?

Under the PST system, any PST we paid for a computer, printer, box of paper, vehicle or tool was a cost that got worked into our pricing as overhead. Since the HST was implemented, we now get all of that money back (as an Input Tax Credit against what we have charged).

Our most important service is our ability to provide an immediate response to client alarms. So, we decided that the best thing to do with those savings was to purchase a new vehicle (which was also cheaper for us with the HST) and add a full-time driver to join our alarm response team.

The impact of adding that one position on the road, as well as the additional person on our customer service team, (both of which added no new additional ‘cost’ to us) resulted in quicker response times and happier clients. We’ve seen an increase in the number of referrals we get each month and added a second new vehicle (and full-time driver) to accommodate the new business.

We are currently recruiting for two new sales people to join our team to help keep up with demand.

Without question, the HST helped put us in a position where we could grow so quickly. The old PST system added a significant cost to our business that did not offer value to us, our clients or even the government. By contrast, we are now growing much faster (resulting in more tax revenue for the government) and we are able to focus much more on service delivery (resulting in much better value for our customers).

With the pending rate reductions on the HST (to 10% by 2014), the impact to consumers has been reduced and I firmly believe that we (business, government and consumers) are all better off with the HST rather than going back to the PST.

The impact of reverting to us would be that we would be forced to choose to either 1) reduce service levels, or 2) raise our prices in order to maintain the same cost structure.

The PST hurt our business and wasted our clients’ money.

Has Provident lowered prices as a result of the HST savings?

With a few exceptions, we have not reduced our prices since HST implementation. Based on our understanding of our clients & our service delivery model, we decided that the best use of the savings we realized as a result of the HST was by investing in new trucks and new jobs. Our business is all about speed, efficiency and service… we elected to spend the money on things that would improve all three.

That was a business decision and one that our clients will judge us on. If a price break is more important, they will tell us &/or simply cancel their service. If we do not keep our clients happy, we will not be in business.

The specifics of how we applied the savings is all about our particular situation. If I was leading a different business, in a different market, where price was the primary differentiator, I would likely make a different choice.

The HST helps BC businesses save money (and waste far less of it). As a result, those businesses are free to choose where those savings are best spent. The decision to add jobs, raise wages, cut prices or anything else with the money is theirs to make.

Ultimately though, it is the consumers who will make the final call as to whether or not a company has made the right choice. Business is far too competitive. If consumers feel they get better value for a better price somewhere else, they will go there. They will vote with their dollars. Businesses who choose poorly will be left behind… quickly.

What’s the deal with Bill VanderZalm?

In all honesty, this is one of the questions that I get asked most often. The truth is that I have no idea.

Listening to him speak, I am often amazed that anyone – anywhere – could (or could have ever) taken him seriously. He’s certainly not one to let the facts get in the way of a good story.

But to be fair to Mr. VanderZalm, Chris Delaney & Bill Tieleman (the other 2/3 of FightHST) have been equally outrageous in their statements, accusations and pronouncements.

Some of the best critiques of FightHST have been made by Chris Thompson, a UBC Economics grad and current UBC Law student who created two great videos that sum up the absurdity of FightHST.

Here’s the first, titled ‘FightFightHST: A Letter to Bill VanderZalm…’ focused mostly on dispelling some of the misrepresentations made by Mr. VanderZalm…

His follow-up video, FightFightHST 2: Fighting the Man, who was “The Man”, who is “Fighting the Man”, included all three FightHST leaders…

The reality is that Mr. VanderZalm accomplished something incredible. He spearheaded the first successful petition under the Recall & Initiative Act. He and his group got more than a half million people to sign the petition and force the referendum.

If it hadn’t been for that, there is no way that we would have seen the Government offer a two point reduction in the HST (to 10% by 2014) which, when implemented, will tie British Columbia with Saskatchewan as having the lowest sales tax in Canada (Alberta is excluded because they’ve got oil instead of a sales tax).

The fact that Mr. VanderZalm has not already declared victory and dropped the FightHST argument suggests to me that this is much more of a political & personal battle for them than an honest debate about an economic policy.

The fact that the BC NDP have joined in the fray and are also pushing for a ‘Yes’ vote alongside Mr. VanderZalm, irrespective of what it costs our Province, is also telling.

The BC NDP and Mr. VanderZalm certainly make strange bed-fellows. More interesting, however, is the fact that politically, nobody else appears to agree with them.

It is not just the BC Liberals who support the HST. The BC Conservatives want to keep it. Jane Sterk, the Leader of the BC Green Party has indicated she will vote ‘No’. British Columbia’s two Independent MLA’s, former NDP’er Bob Simpson and Vicki Huntington voted in favour of the recent amendments to the HST that will see it drop to 10% by 2014. Even one of the BC NDP’s long standing Economists has come out in support of the HST.

The NDP governments in Nova Scotia and Ontario support the HST. Even Jim Stanford, the Chief Economist of the Canadian Auto Workers, Canada’s largest trade union, has warned members against getting involved in anti-HST efforts.

In Mr. Stanford’s 2009 letter to CAW members, he commented on the political opposition to the HST:

“Political opposition to the HST does not reflect a well considered call for a fairer tax system. It’s more about electoral gamesmanship by opposition parties eager to damage the current government. When the anti-HST coalition tries to tap into knee-jerk anti-tax sentiments to win more votes, it also encourages a regressive, potentially dangerous attitude to government and the public services those taxes support. We’ll pay dearly for that kind of attitude in coming years.”

Over the past year, we have seen support for the HST rise with every poll. From an original approval rating of only 12%, support for the HST has been steadily climbing. In every single poll conducted,support for the HST has increased while the number of people who want to go back to the old system has gone down. The latest polls, at the outset of the voting period, indicate its going to be a very close race.

As a small business owner who has seen how HST helps make us more competitive, eliminates government waste as well as helps us to create more jobs, I am frustrated by the FightHST misrepresentations that serve to push our entire province backwards for the perceived political gain of a few.

But it’s not just small business owners.

People like Chrystal Ocean need voters to understand how the HST has put her and the rest of British Columbia’s most vulnerable citizens ahead financially.

School Districts need voters to understand how the HST is capable of putting $500,000.00 back into their budget… allowing them to get more done, with less tax dollars.

Economists like Kevin Milligan and Tax Lawyers like David Robertson who have both spent their entire professional lives studying issues like the HST want voters to understand how the HST helps BC and that the lies told by FightHST have been discredited by virtually every single Economist in our Country.

The Certified General Accountants Association of BC wants voters to understand that the HST is a much fairer tax than the old PST system.

Krishna Pendakur, an SFU Economist, and self-proclaimed ‘lefty’ wants voters to understand ‘why the Left should love the HST’.

The trick isn’t to try and find credible experts who support the HST, it would be to find a single one that does not.

The bottom line for me is that this HST argument is a lot like having some sort of medical condition where you get an opportunity to hear from every doctor in the country who specializes in that condition and they ALL agree on both the cause and the cure.

You also ask your brother’s basement tenant what he thinks. He mentions that he once  knew a guy, who saw a show on TV that clearly proved all doctors were idiots (and that they were also conspiring to destroy the world).

It’s a dilemma. Do you listen to the advice of the experts who have dedicated their professional lives to the study of the issue, and who unanimously agree on what will solve the problem, or the guy in the tinfoil hat?

What was it like being one of the public faces of the HST debate? How much hate mail did you receive?

One of the many lessons I learned is that there is no shortage of conspiracy theorists who are capable of weaving incredible stories together based on a loose collection of random thoughts, an occasional fact, opinions & outright lunacy. From my experience so far, this talent seems to be concentrated on a few people with a lot of time on their hands… and an internet connection.

To say that I’ve received some interesting emails would be a gross understatement.

One of my favorites accused me of somehow masterminding the Canada Post strike to coincide with the mail-in referendum. Another, that I was only trying to get the HST to stay, in order to increase crime levels, in order to benefit personally (those were, apparently, the only steps involved).

More than a few people took to their own blogs and created their own reasons to explain why I would be in favour of the HST. Here’s a quick excerpt from one such blog that gives a flavour of the content…

The reference to ‘what he’s read’ is to another blog that read through the press clippings on our own website, found an article from Profit Magazine where I am quoted explaining our PST fight, and a quote from Premier Gordon Campbell thanking us for providing great service during a security incident several years ago in his constituency office. Two and two were put together, and the “obvious” answer of thirty-seven was arrived at.

For what it was worth, I asked the writer to amend his blog post to at least tone down the libel a bit… He sent me back an email telling me to beat it (not using that exact phrasing), but at least added the words ‘in my own personal opinion’…

Sadly, Provident paid every single penny of our PST debt referenced in the Profit article (more on that below). We were ‘forgiven’ nothing. That PST incident was, however, my inspiration for getting involved in this whole HST argument to start with.

I was even accused of not being a real person. I decided to take it as a compliment that I had to respond to accusations of being a ‘paid actor’.

I’ve also learned how easily & quickly the politics of an argument like this overshadow the argument itself and keep people from considering any viewpoint other than the one they started with. Many people seem completely focused on wanting to ‘send a message to the BC Liberals‘ at any cost … and in most cases, without having any real idea of what that cost actually is (no, the $1.6B transfer payment will not be ‘forgiven’).

Trying to debate the specific merits of the HST with someone whose only answer to any argument is “The Liberals lied” is a pointless endeavour with no upside for anyone. Thankfully, I have had the opportunity to speak to enough other people, willing to have a real discussion, to not destroy my faith in humanity.

Our Operations Centre team at Provident (our team who answer all incoming telephone calls) have done a great job putting up with the increased volume of callers wanting to get in touch with me to tell me that I’m an idiot or, in quite a few cases, simply wanting to ask some thoughtful and reasonable questions about the HST.

With the exception of the people who called/emailed just to say I’m stupid, I called or emailed every person back. I offered my explanations about how the HST has benefitted our company, how it has created jobs and why the PST was such a complicated and expensive mess for us (and our customers).

My frustration (although tempered with some great entertainment value) with the wingnuts, was overshadowed by the vast majority of people who contacted me with good questions or to have a real discussion on the issue.

 

 

 

 

CTV ran a story last night in response to a Vancouver Police advisory regarding an increase in thefts from construction sites in Vancouver over the past couple months as well as a recent Vancouver Island theft where more than $100,000.00 of equipment and copper were stolen from an unprotected site.

As part of the story, they came to our Operations Centre in Kerrisdale to get a demonstration of Provident NightOwl to see how it can solve the issue of providing complete security for construction sites on either a temporary or long-term basis.

 

 

Earlier this year, Provident introduced a new service called NightOwl. It’s a completely wireless, remote video alarm system that is able to detect activity and then send live video alarms to our Operations Centre in Kerrisdale.

NightOwl is primarily focused on the construction market because it is so easy to deploy and is much cheaper (and more effective) than a full-time Security Guard. However, we’ve also started using NightOwl in commercial sites, vacation properties and other locations that are outside of our guaranteed five minute response zone.

Some of the features that make NightOwl such an interesting service/product is that it does not require any electricity, telephone lines, internet connection or any other infrastructure to work. It can detect activity in absolute darkness and sends video alarms to us wirelessly.

The video quality is intentionally low-resolution (read: crappy) because it has been optimized to provide quick detection and to be able to be transmitted to us very quickly. When we receive a NightOwl video alarm in our Kerrisdale Operations Centre, all we need to determine is whether the cause of the alarm is a human or not. If we see anything suspicious, we can call the Police and report a verified crime in progress… which gets a very quick response (as opposed to a regular alarm without verification which gets very, very slow – if any – response from the Police).

Click on the video below to watch a video recap from a burglary on Monday, June 20th 2011 where NightOwl detected two crooks at an Abbotsford construction site. From our Operations Centre in Kerrisdale, we directed the Abbotsford Police to exactly where the burglars were and both of them were arrested.

Click below to watch a quick video we filmed Friday to explain the impact of the Shaw Digital Phone network outage…

Another video clip from AreYouPayingEnough.com talking about our Kerrisdale showroom…

Provident was featured in the New York Times last week in Paul Sullivan’s follow-up article about home security.

Sullivan’s original column sparked a fair amount of drama within the security industry… some reasonable, most of it… not so much. In that first article, he pointed out that the majority of alarms fail to deliver much ‘security’.

Slow, or non-existent, alarm response coupled with what could most politely be referred to as ‘poor service’ has served to paint the alarm industry with a fairly negative brush.

I wrote my thoughts on the article in my last blog post… pointing out that the faults that Sullivan listed are actually worse than he described (fortunately, they are also all solvable… most effectively through five minute proofing).

I ended up speaking with him later in the week for a follow-up story that was prompted by the flood of feedback that he received.

Sullivan divided the people from whom he received feedback from as following into one of three groups: Technologists, Pessimists and Pragmatists. Fortunately, I was considered one of the Pragmatists.

Here’s an excerpt of where Provident is mentioned… (click here to read the full article)

“Michael Jagger, the president of Provident Security in Vancouver, British Columbia, said his company had a different model to respond to alarms: it has 6,000 customers but they all live in particular neighborhoods that the company monitors closely. As soon as an alarm goes off, one of the company’s cars responds in under five minutes, charging $35 unless the homeowner reports a false alarm.

Even though his company can respond quickly, he said, he still instructed clients on how to secure their valuables until someone arrived. His “five-minute fixes” were often ingenious and would work to confound any crook.

He suggested putting a deadbolt lock on your master bedroom. However unsightly this may be, he said master bedrooms are the first place burglars go to look for jewelry and money. While they could still break down the door, the lock will slow them.

Similarly, he suggested people with alarms put poles in their sliding glass doors that are two inches too short. That way, when the burglar tries to force the door open, he will trip the alarm but still be stuck outside. (People without alarms might try putting a thick washer at the top of the slider to keep the crook from lifting it off the track.)

To keep your high-end plasma-screen televisions on the wall, Mr. Jagger said people should use a bicycle lock to attach the TV to the mounting bracket. Yes, the burglars may still rip the TV off the wall, lock and all, but it will take them a bit of time. The same goes for bolting down computers and safes. If they’re not fastened to the floor they are easy to take out.

“An alarm is not a deterrent in and of itself – despite what most other security companies will try to suggest,” Mr. Jagger said. “Because we know that we can get to your place within five minutes, you need to ensure that from the point at which your alarm trips and sends us a signal, it will take a burglar at least five minutes to get to what you are trying to protect.”

Provident’s response time may be unique to its neighborhood model. But the notion of delaying burglars with these simple solutions could reduce what they steal from anyone’s home.”

The NY Times printed an article by Paul Sullivan on Saturday called ‘Weighing the Value of a Home Alarm System‘.

In the article, Sullivan points out one of the central tenets of this blog over the past six years… that the most important reason for paying for a monitored alarm is to generate an immediate response.

Sullivan argues that given a very high false alarm rate (he suggests 80% of alarms are false – although my experience puts that figure much closer to 98%) most Police departments cannot, or will not, provide priority response.

His article should give a lot of people reason to question the ‘value’ that they are receiving from their alarm.

Unfortunately, for the vast majority of alarm owners, the reality is even worse than what Sullivan describes.

Sullivan’s article is focused on the following five major points:

1. Issues with power failures;
2. Slow Police response times;
3. Insurance Discounts
4. Deterrent value is outweighed by cost of an alarm
5. Getting more than just burglary detection from an alarm

[This post addresses the first two points above... I'll post my comments on the last three issues later this week.]

Sullivan is correct in all of his criticisms about how most alarms work. However, not all companies handle these common issues in the same way.

Here are my thoughts on each of his points…

POWER FAILURES: “People may be surprised to learn that when they most need their security system to protect their house, they oftentimes cannot rely on it. Jackie Ostrander discovered that when a storm knocked out power to her home in Greenwich, Conn., for a week in March — too long for her backup battery to keep going. And it took her security company three weeks to restart her system.”

Virtually every alarm system on the market has the ability to communicate that power has been lost as well as if the back-up battery is low.

At Provident, we set-up all of our clients’ alarms to send every possible signal, not just alarms. As a result, as soon as power is interrupted, we receive a signal from each of our affected clients. Once the back-up battery starts to get low (after approximately 6-8 hours on most alarms that we’ve installed) the alarm will send us another signal.

At that point, we will attempt to contact our client to confirm that they are home and ask if they would like to replace the battery and/or implement additional security measures (such as mobile patrols or posting a guard) while the power is out. If we cannot get a hold of them, we will respond to the home and replace the back-up battery.

Most of our clients have standing instructions with us telling us what to do in the event that we cannot reach them.

The ‘power failure’ issue is really a ‘response issue’ and can be easily solved.

POLICE RESPONSE TIMES: “There are about 36 million security systems in the United States, half of them in homes. Revenue for the industry was $28.2 billion in 2009, according to the Installation Business Report, an annual security industry survey. So a lot of people apparently think their homes are going to be impervious to burglars.

But even when the systems are working properly, the police response times can be slow.

Stan Martin, executive director of the Security Industry Alarm Coalition, acknowledged as much. He said that in big cities like New York, Atlanta and Chicago, police could take 30 to 45 minutes to respond, while in smaller towns the best that could be hoped for was six to eight minutes.”

The truth is that in many cities, large and small, Police Departments are making the decision to not respond at all. For example, Police do not respond in Whistler, Salt Lake City or Fremont, California. Other cities, like Seattle, have implemented a misleadingly titled program called ‘Enhanced Call Verification‘.

Of those Police Departments that still respond, the response time is often far longer than just “30-45 minutes”. In Vancouver, the latest Patrol Deployment study showed that the average Police response time to an alarm is 2 hours and 6 minutes.

Sullivan goes on to point out that even when the Police do respond, it’s hardly a complete ‘service’…

“To combat false alarms, many police departments charge after the first or second one, he [Martin] said. In Stamford, Conn., for instance, the cost is $75. Yet these fines are often levied when a police car just drives past your house, not even pulling in the driveway, let alone walking around the property.”

The fact is that the alarm industry has gotten away with providing an incomplete service for a very long time. What other industry is able to sell a service that relies on a government agency in order to provide any value?  The alarm industry is very much a parasite on the Police … at least the traditional model of delivering alarm ‘service’ certainly is.

The most important  reason for paying for alarm monitoring is to generate an immediate response. That’s it. An alarm provides information that has an incredibly short shelf life in order to be of any value.

If the alarm signal being received is a ‘low battery’, what can the Police do about it? In many cases, the Police do not even know that the alarm they are responding to was a battery issue rather than an actual burglary signal.

The Police do not hold house keys and often do not know what exactly is ‘in alarm’… they just get told that there is an ‘alarm’.

Click below to watch a video clip from one of our home security seminars where I explain how Police response actually works… and why any incident is most likely long over before the Police even first hear of an alarm, let alone get a chance to start responding to it.

This is why at Provident, we do not make any verification calls.

When an alarm trips, we send our response teams to provide immediate response. We hold keys and we know exactly what the alarm is reporting… and what to do to correct it. If the Police are required, we call 911 from the site and report a crime in progress… a call that results in very fast Police response.

We guarantee a five minute response, but we also work to educate our clients than a security alarm is NOT a security ‘system’. An alarm is one part of your overall ‘system’ and should not be relied on as a stand-alone security tactic. As far as effective security tactics go, nothing beats Five Minute Proofing.

Without effective ‘Five Minute Proofing’ in place, an alarm is unlikely to provide any real value in minimizing loss during a burglary. The good news? Many Five Minute Proofing strategies are either free or very low cost.

Click below to hear more about Five Minute Proofing…

INSURANCE DISCOUNTS, DETERRENT VALUE and GOING BEYOND SECURITY…

This post seemed like it was going to be far too long. Definitely too long for a single post. If you’re still reading this far down the page… Thank you.

I’ll post the balance of my thoughts on the points Sullivan raised  later this week.

Just about every media outlet in North America has already reported on the burglary at one of Eli Lilly & Co.’s Connecticut warehouses this past weekend (here are the Wall Street Journal, NY Times and over 1,000 other versions). Most of the reports have focused on the fact that the crooks were able to get away with more than $75 million in prescription drugs, making it one of the biggest pharmaceutical heists in history.

The crooks gained entry to the warehouse by cutting a hole in the roof and then rappelling down into the warehouse. According to an ABC News report on the incident, once the crooks were inside they disabled the alarm and spent a couple hours loading pallets of drugs into at least one truck in the loading bay.

Here’s a video from a Hartford News station that explains what happened…

Other than the fact that that is an amazing amount of Prozac for someone to try to sell, the most interesting part of this story (for me at least) is the fact that the security failed so miserably.

Dan Gelinas is a journalist at Security Systems News and has been posting on his blog about the security angle in this story.

He’s chased down the Enfield, Connecticut Police Department and confirmed that they never received any request for dispatch from the warehouse’s alarm company.

From everything that’s been reported so far, it appears that the alarm system either did not work or, if it did, the alarm signals were ignored. Either way, whatever happened, it shouldn’t have… a properly designed security system would have detected the burglary and made a multi-hour heist impossible.

The incident is reminiscent of the 2008 heist at the UBC Museum of Anthropology where crooks got inside and stole fifteen priceless Bill Reid pieces of art, without triggering any kind of security or Police response. In that case, the Museum tried to suggest that, despite the theft, their security was working. I wrote about the incident in a couple blog posts here and here and outlined why I thought that was a crazy statement to make.

Here’s a video clip from Global TV in Vancouver about that burglary (I talk about  some of the ways that artwork, or anything, can be protected at the 2:43 mark).

In the Museum’s case, the final story ended up being that the crooks were able to circumvent all of the security technology by simply calling ahead and asking for any alarm signals to be ignored. Seriously.

There are a few security measures that should have been in place to prevent either of these incidents from happening…

Your security is in your redundancy…

Whether you are protecting your home, a corner store or a warehouse where you have $75 million dollars worth of Prozac, you cannot afford to have a single point of failure.

Your security is in your redundancy. That means that you need to have multiple lines of detection: contacts on every door and window, glassbreak sensors, motion detectors and shock sensors are required throughout.

Most importantly, an alarm should not rely on a single form of communication. If the only way that an alarm sends a signal is over the telephone lines, and that phone line gets cut (or unplugged from the inside) the alarm will not communicate.

At Provident, we use BLINK mesh radio to provide an almost instantaneous wireless signal to be sent for every alarm in our client’s homes and businesses. We use the telephone line as a back-up communication method which ensures that we receive every alarm signal twice… and if a crook cuts a phone line, it will not have any impact on the alarm’s ability to send a signal.

Protection against system tampering…

As just one example, many options exist for motion detectors that are equipped with ‘anti-masking’ technology which detects attempts to block a motion detector with spray paint, or anything. Here’s an example of one detector from Honeywell that will prevent tampering.

Similarly, options exist for almost every type of device (and the wiring) to be protected against tampering.

Ensuring that there is no single point of failure… and not relying on a single detector for any one area… will also significantly increase security.

Regular testing of the alarm… where every single device is inspected and tripped will also reduce your risk.

Protection against an inside job…

Just because a burglar has a little help from the inside (or if the burglar is already an insider) there is no need to make it any easier for them to steal your stuff.

To start with, every person who uses your alarm should have their own, unique, alarm code. If you have a housekeeper who only works on Wednesdays, or daytime staff in your office who should never need to be at work at 2:00am, their alarm codes should restrict them to the times that they are allowed to access your property.

The vast majority of alarms are capable of restricting users access by time of day. Why give out 24 hour access if it’s not required.

I’ve written a few posts on this topic, including…

Fresh Milk and Why Your Alarm Should Not Share

Your alarm should not share

Protection against forgetfulness…

The fact that an alarm user has forgotten to arm the alarm in your store or office by accident, or on purpose, does not need to result in your belongings being left unmonitored and ready for easy pick-up by crooks.

Every alarm company offers a service called ‘Supervision’ which means that if your alarm is not set by a certain time each day, a signal is sent to our Operations Centre to be followed up on.

We provide this service to many of our clients to ensure that closing staff have locked up and armed the alarm by a certain time each night. Likewise, if the alarm hasn’t been disarmed by a certain time in the morning (meaning that noone has opened the store yet) that will also create an alarm signal in our Operations Centre.

Either way, you’re protected against human error that could leave you unprotected.

I wrote about this service in a post about Lindsay Lohan’s burglary last year.

Five minute proofing…

The most effective tactic that you can use to minimize your risk of being a victim of burglary is to five-minute proof your important belongings.

In the Eli Lilly case, even one-hour proofing looks like it would’ve worked.

Five-minute proofing is the culmination of many different security tactics where the goal is to ensure that from the point at which the alarm is tripped, it would take a crook at least five minutes to get to your most precious belongings.

The first step to successful five-minute proofing is to push your alarm detection out as far as possible… ideally, you want to detect the crook while he is still on the outside, rather than waiting for him to get inside.

In the Eli Lilly case, video cameras using video analytics… or even outdoor beams installed on the roof could have offered an early warning about what was going on.

It will be interesting to hear the rest of the story about what actually happened in Connecticut as details are released.

The security industry doesn’t have a great reputation for honesty.

Whether it’s unscrupulous door-to-door “sales”, aggressive sales practices, outright deception, misleading advertising or simply the fact that most alarm monitoring services could best be described as ‘incomplete’ the security industry hasn’t earned a very good reputation. It’s too bad because there are certainly many alarm companies in North America who provide great (and honest) service and are working hard to improve our industry.

As is the case in every industry, their will always be shady operators, but it’s frustrating when some of the biggest players, who are in a position to lead in a positive manner, do things that only add to the mistrust and bad reputation that the security industry has.

Case in point: Broadview Security (formerly Brinks Home Security) television commercials. They are ridiculous.

Being ridiculous wouldn’t be so bad if the message  they’re  selling wasn’t so serious.  In my opinion, their new commercials represent the worst kind of fear-based marketing.  More importantly, the ads are very misleading. The vast, vast majority of alarms simply do not work the way they are portrayed in the commercials (and certainly none of the $99.00 systems work that way).

Click below to watch the first ad, called “The Ex”…

Unfortunately, many people do not know how the alarm industry actually works… let alone what happens when an alarm trips. Rather than perpetuating false stereotypes about alarm systems, Broadview Security is doing the entire alarm industry a disservice with these reprehensible advertisements. As a Security company owner, these ads are simply embarrassing to watch. As an average consumer who doesn’t know how alarm monitoring service works, they could be very dangerous.

Beyond simply being offensive in general, here are a few specific reasons why this commercial should be pulled:

1. When the angry ex-boyfriend kicks in the door, the alarm instantly sounds.

Given that the woman had just armed the alarm less than a second before, the exit delay would have still been counting down.

The ‘exit delay’ is the time between when you arm the alarm, and the time that it actually ‘sets’. This delay is in place to allow you to arm your alarm and then get out of your home & lock your door without creating a false alarm every time.

The ‘exit delay’ can be customized, but in most cases it’s set for between 45 and 60 seconds.

With the way that almost every single alarm system that I have ever encountered in my career, if the scenario played out in the commercial happened in real-life, there likely would have been about 30 seconds left in the ‘countdown’ before the alarm was actually set… let alone triggered.

As a result, in the commercial when the ex-boyfriend broke in, the alarm would still have been counting down & no alarm would be tripped until the countdown was finished and the alarm was actually armed. Even then, most alarms are configured to send what’s called an ‘Entry/Exit’ alarm which treats alarms created within a very short time of the system being armed differently than an alarm that is tripped hours later.

Either way, with or without an exit delay time, the alarm simply doesn’t work that fast.

2. Once the alarm gets triggered the phone starts ringing immediately.

In fact, before the woman even has a chance to make it halfway up the stairs, the phone inside the house is ringing and it’s Broadview Security on the line wanting to know if everything is ok.

Once an alarm is tripped, it will still take AT LEAST 30 seconds for the alarm signal to be sent to the central monitoring station using the telephone line. The alarm needs this time to seize the phone line, dial the long distance number for the central monitoring station, connect with the receivers there and then transmit the alarm data. This process, using a telephone line, takes at least 30 seconds. Once the alarm signal is received, it will take more time for the signal to be presented to an operator who will then make a call back to the premises.

In addition, the alarm uses the telephone line to communicate with the central station. For as long as the signal is being sent, usually at least  30 seconds, the phone line is not available to call in or out.

Unless the woman in the commercial has two telephone lines, she won’t be able to use the phone right away…  either to receive a phone or make her own emergency call to 911 because the alarm system will be using the line to send the alarm signals.

The bottom line is that alarms simply do not work this way. A properly designed alarm can be a very important part of your overall security plan, but it is not a cure-all solution. A $99.00 (or any)  alarm will not save you from a stalker who is motivated and committed to breaking into your home.

While it is certainly possible to speed up how fast an alarm can send a signal (for example, by using BLINK monitoring) or minimizing the risk of dead phone lines by having a dedicated line for your alarm, none of these options are available for anything close to $99.00

This commercial is akin to seeing a car advertisement for a beautiful new car with every conceivable option (plus a couple that don’t exist at all) for an incredibly low price. But when you go to the dealership to pick up that new car you bought based on the ad you saw, you’re given an old bicycle with a flat tire and cracked frame. When you complain that the bike looks and operates a lot differently than that car in the commercial, you’re told that everything you saw on TV is actually not included in the pricing that was mentioned. Car companies aren’t allowed to do that. In fact, in every car ad I’ve seen the small print on the screen makes it clear that they are showing a specific model with specific options. Why doesn’t the security industry point out that the images you see have little or no relevance to the price that is advertised?

If you have a specific security threat/risk, like the character in the commercial, a $99.00 alarm is not going to do anything for you other than cost you money. To suggest that it will provide protection against a motivated criminal who is targeting you is irresponsible and simply wrong. Broadview Security knows this… they’re just hoping that most North Americans won’t.

–

In the spirit of belaboring the point just a little longer, it’s not like this is the only commercial that Broadview/Brinks has run like this. Far from it, in fact, it’s more of a specific formula that they use in most of their ads in order to terrify people into shelling out $99.00 plus a monthly monitoring fee.

Here’s a selection of some of their other TV spots vying for the ‘Most Offensive’ title:

This one is called ‘Backyard’ and shows a mother with her daughter going in for lunch… and instant arming the second that they do. Like “The Ex” the bad-guy breaks in a second after they’ve gotten into the house but takes off as soon as he hears the alarm sound. Broadview makes the magically quick call to assure the woman that they’ll get right on to calling someone else to help.

This one’s called “New Home”, and preys on the fear of a night-time burglary when everyone is asleep… despite the fact that the vast majority of residential burglaries happen mid-day … and after an attempt to verify that the house is empty…

Or this one, called “Wrong Door”. Not sure why the burglar would spend so long trying the door knob, I suppose just for dramatic effect…

Or this one, called ‘Treadmill’ where the alarm scares off the two burglars (dressed like they just got off of a set where they were playing burglars in a movie) who again are targeting a woman, alone in her home at night…

Or this beauty, that shows the same bad-guy, all dressed in black who sees the family inside and then decides to smash out a large window with a crowbar before running off at the sound of the alarm…

Here’s another black leather jacket clad burglar smashing a window while a young mother and her kids are alone at home…

This one is called “montage”… and plays like the trailer for a really bad horror movie…

If this is what one of the largest, and most successful alarm companies puts out, it’s no wonder that so many others in the industry figure it’s ok to mislead people.

Here are a few links to other posts that I’ve written that fit in with this topic…

10 Reasons Why Most Home Alarms are Useless (and what you should do about it)

“The Alarm Industry is a Parasite on the Police”

Why Police Response to Burglar Alarms Doesn’t Work

Fox 12 in Portland reported a story today about a pair of burglars who Police believe may be posing as door-to-door Window Salesmen.

The video clip of the story implies that the impostors never got inside of the victim’s home, but a couple of days after their visit, a Portland homeowner had his safe targeted in a burglary.

Irrespective of who actually committed the burglary, the notable part of the story was the fact that the victim was keeping $13,000.00 cash in a safe that he had bolted down in his master bedroom closet.

Here’s an excerpt from the story…

On Tuesday, Lee said he found his home trashed. Thieves stole rare coins, jewelry and $13,000 from his safe. Lee said the burglars broke in through a door and used tools from his garage to break into his safe.

“I had it bolted to the floor,” he said. “Evidently, it wasn’t as safe as I thought it was.”

There are few lessons from this story… the first two are the same as in my post about the Apple Store in New Jersey getting emptied in 31 seconds:

(1) You CANNOT make it physically impossible for someone to break in; and

(2) Five-Minute Proofing is the most important security tactic.

Of course, the most fundamental lesson is that you should not keep large amounts of cash in your home… put it in the bank. If you decide that you want to keep cash at home, by all means, put it in a safe and bolt it down. But, if you do not have a monitored alarm that will alert responders that someone is trying to get at your safe… they can take as much time as it takes to remove it.

The time that it takes to remove a safe is a lot less than most people think. Safes, even really, really heavy safes, are only difficult to move around when you are trying to be careful not to damage the walls (or anything else). If you don’t care about making a mess or breaking anything, moving a safe isn’t that hard. Just ask Lindsay Lohan.

Relying on a safe, just like relying on an alarm, often provides a false sense of security. Your security is in your redundancy. It’s all about putting multiple steps/tactics/measures in place.

If you have a safe, but do not have it monitored, you might want to think about how important the things that you have inside of it are. You might be better off spreading your valuables all over your home rather than keeping them all together in one easily movable box.

SIDE NOTE: In the video, the reporter mentions that the homeowner thinks that the impostors were looking for “window burglar alarm tape” on the windows. That’s fairly unlikely given that foil is rarely part of an alarm system that has been installed in the past 25 years.

If they were looking at the windows, it’s much more likely that they were simply looking through them in order to see if there was anything of obvious value that was easily reachable inside.

If they were savvy enough to look for alarm equipment, they would have simply cut the telephone lines.