ADT to Pay $1.3 Million for Illegally Charging 3,400 Military Families Who Were Ordered to Relocate
The DOJ found that ADT imposed an illegal 30-day notice requirement on servicemembers terminating home security contracts after receiving military relocation orders. Federal law allows immediate termination -- ADT charged them anyway.
ADT Security Services will pay over $1.3 million to at least 3,400 military servicemembers after the Department of Justice found the company illegally charged them for terminating home security contracts when they received military relocation orders.
Federal law is unambiguous on this point: the Servicemembers Civil Relief Act allows active-duty military personnel to terminate consumer service contracts immediately upon receiving orders to relocate to a location that doesn't support the contract. A soldier ordered to move from Georgia to Germany doesn't owe ADT a 30-day notice period. ADT imposed one anyway.
What ADT did
When servicemembers contacted ADT to cancel their home security monitoring after receiving relocation orders, the company enforced a 30-day notice requirement -- meaning servicemembers were billed for an additional month of service on a home they were leaving because the military told them to. Across at least 3,400 accounts, ADT collected fees it had no legal right to charge.
The settlement
Under the consent order filed in the Southern District of Florida:
- $1,260,000 in compensation to affected servicemembers
- $79,380 civil penalty -- the statutory maximum for a first SCRA violation
- ADT must overhaul its policies and train employees on SCRA compliance
- The company must implement procedures to identify servicemembers and process their termination requests without imposing the illegal notice requirement
A pattern across industries
ADT is the latest in a long line of companies that have charged military families fees prohibited by federal law. Since 2011, the Justice Department's Civil Rights Division has recovered over $488 million for more than 152,000 servicemembers through SCRA enforcement.
The companies caught violating the SCRA share a common feature: they build cancellation friction into their standard contracts -- early termination fees, notice periods, equipment return requirements -- and then apply those same policies to servicemembers whose legal right to cancel supersedes the contract terms. The violation isn't always malice; it's often that the company's systems aren't built to recognize that military orders override standard cancellation policies.