Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Home security company ADT settles FTC charges of deceptive endorsements, (Mar 6, 2014)
Organizations Mentioned:ADT LLC | ADT, LLC
By Linda O’Brien, J.D., LL.M.
Home security company ADT LLC has agreed to refrain from misrepresenting paid endorsements as independent reviews to settle FTC charges that it misrepresented that reviews were independent and failed to disclose that the experts were being paid to promote its products (In the Matter of ADT LLC, File No. 122-3121).
Based in Boca Raton, Florida, ADT manufactures and markets the ADT Pulse home security and monitoring system and various other security products and services. The FTC’s administrative complaint alleges that ADT paid spokespersons to demonstrate and review the ADT Pulse on television radio news programs and talk shows across the country, and in blogs and other online material. ADT, the FTC alleges, misrepresented that the reviews were independent, and failed to disclose that the experts were being paid by ADT to promote the Pulse system.
The proposed consent order (1) prohibits ADT from misrepresenting that any discussion or demonstration of a security or monitoring product or service is an independent review provided by an impartial expert; (2) requires ADT to clearly and prominently disclose, in connection with the advertising of a home security or monitoring product or service, a material connection, if one exists, between an endorser and the company; and (3) requires the company to promptly remove reviews and endorsements that have been misrepresented as independently provided by an impartial expert or that fail to disclose a material connection between ADT and an endorser. The settlement agreement will be subject to public comment through April 7, 2014.
“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 FTC Bureau of Consumer Protection Director Jessica Rich. “When a paid endorser appears in a news or talk show segment with the host of that program, the relationship with the advertiser must be clearly disclosed.”
Companies: ADT LLC
News: Advertising ConsumerProtection FederalTradeCommissionNews