The home security company ADT LLC has settled Federal Trade Commission charges that it misrepresented that paid endorsements from safety and technology specialists were independent reviews, and it failed to disclose that the specialists were being paid by ADT.
Under a settlement, ADT is prohibited from misrepresenting paid endorsements as independent reviews in the future.
ADT manufactures and markets the ADT Pulse home security and monitoring system and other security products and services.
The FTC’s lawsuit alleges that ADT paid spokespeople to review the ADT Pulse on NBC’s Today Show, other TV and radio news programs, talk shows, and blogs.
“It’s hard for consumers to make good buying decisions when they think they’re getting independent expert advice as part of an impartial news segment and have no way of knowing they are actually watching a sales pitch,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.
ADT paid three spokespersons – with knowledge in child safety, home security, and technology – more than $300,000 to promote the ADT Pulse, with one spokesperson receiving more than $200,000.
Two of those spokespersons also received a free ADT Pulse security system, valued at about $4,000, and free monthly monitoring service, according to the lawsuit. In exchange, the spokespersons appeared on more than 40 TV and radio programs nationwide and posted blogs and other items online.
ADT set up media interviews for the endorsers through its public relations firms and booking agents – often providing reporters and news anchors with suggested interview questions, and background video, also known as b-roll, according to the lawsuit.
The paid ADT endorsers were introduced by program hosts as specialists in child safety, home security, or technology, usually with no mention of any connection to ADT.
The endorsers sometimes demonstrated child safety, home security, or technology products other than the ADT Pulse, adding to the impression that they were providing an impartial, knowledgeable review of the products.