Contract Terms to Look For

Before signing up with a medical alert service provider, consumers should look carefully at the contract so they know what they are signing.  Here are a few tips on what to look out for:

  • Can you cancel at any time?  Is that in writing?  Many consumers complain about unwittingly signing up for long-term contracts that they later regret.
  • What is the refund policy?  A 30-day refund policy is common, but some providers will only “refund” a portion of the up-front fees.  Check the fine print.
  • The service contract will probably include language making the customer responsible for keeping the phone line in working order.  One family found out about this the hard way.  A disabled man died from lack of care after the medical alert system stopped functioning properly.  The problem was apparently with the phone line. The man’s family sued the medical alert company in a $3 million federal lawsuit, arguing that it should have provided a backup or checked when daily signals did not arrive. A jury exonerated the company in 2008.
  • You may be required by the contract to pay for a separate phone line in order to use the telephone when the system is operating.
  • More and more communities are enacting ordinances imposing fines on alarm companies responsible for false alarms. The contract may obligate you to reimburse the alarm company for any fines. (Such a provision was found in a sample Life Alert contract).
  • Watch out for automatic renewal provisions. Life Alert, for example, after the three-year initial contract term, automatically renews for one-year periods unless 6 months written notice is given by the customer.  

 For samples of medical alert contracts, and highlights of some of their key provisions, click the following links:

Phillips Lifeline

Rescue Alert

Life Alert

 

Liability Issues for Medical Alarm Companies

Medical alarm or alert contract place severe limits on the company’s liability in the event that the company does not respond, or does not respond appropriately. This is not unreasonable, given that these companies could otherwise face staggering liability. But these exculpatory provisions have led to calls for regulation.

A typical provision is that found in a sample Phillips Lifeline contract:

WARRANTIES AND DISCLAIMERS. Subscriber releases and forever discharges [the Lifeline provider] from any and all liability and responsibility which may be caused by, relate to or arise out of the Subscriber’s inability to activate the Equipment, or the malfunction or failure of the Equipment, batteries or systems to operate, either in whole or in part, except that caused by [the provider’s] negligence in the installation, repair and maintenance of such equipment, batteries or systems. Provided that [the provider] installs such Equipment in accordance with the manufacturer’s specifications and performs. appropriate testing of the Equipment, [the provider] shall not be liable for any failure or malfunction of the system.

…IN NO EVENT SHALL LIABILITY OF [the provider] EXCEED THE LEASE PAYMENTS MADE UNDER THE TERMS OF THIS LEASE AGREEMENT. 

Regulation of Medical Alarm Companies

In 2007, a Kentucky woman, Christine Talley, pressed her Lifeline alarm button after suffering a heart attack.  Lifeline left messages for relatives, but allegedly failed to contact emergency responders until much later, after it was too late.  This led to calls for regulatory oversight of the industry. And the result was Kentucky Senate Bill 57, enacted into law April 14, 2008 as the Christine Talley Act.