ADT LLC recently settled allegations by the Federal Trade Commission that the home security company misrepresented paid endorsements from safety and technology experts as independent reviews. ADT manufactures and markets the ADT Pulse home security and monitoring system, among other security products and services. According to the FTC’s complaint, ADT paid three spokespersons a total of more than $300,000 and provided two such spokespersons with free systems valued at $4,000 to demonstrate and review the ADT Pulse on more than 40 televised talk shows and radio news programs, including the Today Show, Daybreak USA, and local newscasts. The spokespersons also posted blogs and other online material regarding the systems.
Each spokesperson was introduced as an expert in child/family safety, home security, or technology – for example, “The Safety Mom” – without any mention of the fact that the person was in fact a paid spokesperson for ADT. Some endorsers demonstrated products other than the ADT Pulse, but also related to child safety or home security, which the FTC found added to the impression that they were impartially reviewing products, including ADT’s products. The settlement order prohibits ADT from misrepresenting that a discussion or demonstration of a security or monitoring product or service is an independent review provided by an impartial expert and requires clear and prominent disclosure of existing material connections between an endorser and the company.
Tip: Under the FTC’s Guides Concerning Use of Endorsements and Testimonials in Advertising, advertisers cannot falsely represent (either expressly or by implication) that an endorsement or review is impartial. Any “material” connection between an advertiser and endorser must be clearly and conspicuously disclosed. A connection is “material” if it might materially affect the weight or credibility of the endorsement. Fine print footnotes, language buried in dense blocks of text, or information hidden behind vague hyperlinks will not be considered a “clear and conspicuous” disclosure.