No single agency or entity regulates home security companies. Instead, a variety of national and state organizations regulate different aspects of these businesses.
National Regulations for Security Companies
The Federal Trade Commission (FTC) provides consumer protections for a variety of industries, including home security. It protects consumers from scams, misleading advertising practices, and overly aggressive sales tactics—all ways a less-than-honest home security company might attempt to take advantage of consumers.
State-Level Regulations for Security Companies
Most of the licensing and regulation for alarm companies and home security providers happens at the state level. Each state has its own guidelines and processes for licensing, and some are stricter than others.
California, for instance, has the Bureau of Security and Investigative Services (BSIS), which handles the licensing and regulation of home security companies. The BSIS also has strict requirements home security companies must meet to do business in the state, some of which even govern the contracts they make with customers.
Unfortunately, while most states regulate home security companies, not all do. This doesn’t mean that companies can do whatever they want in these states—there may still be county or city regulations they adhere to. You can take a look at detailed requirements for alarm system providers in your state.
How Do Insurance and Bonds Factor In?
Many states require that home security companies obtain surety bonds from insurance companies. Surety bonds require the insurance company to pay you, the customer, for damages if the bonded security company you hire fails to meet its obligations.
This is not the same as liability insurance—which all home security companies should have—because liability insurance covers only damage done by contractors, not just poor work. Because of this added liability, insurance companies heavily vet home security companies that apply for bonding. This can provide customers with an additional level of confidence in the legitimacy of a home security provider.
Are Central Monitoring Stations Regulated?
The central monitoring stations that many home security companies use are also subject to some oversight. For the most part, this comes in the form of independent certifications. One of the primary inspection and certification agencies is UL, which has multiple standards that monitoring centers must adhere to. The lab conducts annual audits and inspections to make sure monitoring centers are complying.
Despite the lack of a dedicated regulatory agency, home security companies are still subject to strict rules regarding how they do business. If you’re in doubt, ask to see a company’s licensing information. And if you want more information about home security companies or securing your home, take a look at our resources on how to choose a security system.