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Advertising, Marketing & Promotions Alert >> ADT Settles FTC Charges that Endorsements Deceived Consumers

March 17, 2014

The home security company ADT settled claims brought by the Federal Trade Commission (FTC) that it misrepresented that its paid endorsements by safety and technology experts were independent reviews. 

According to the FTC, ADT employed paid spokespersons to promote the ADT Pulse home security and monitoring system in more than 40 interviews on national and local television and radio news programs and talk shows, including on NBC’s Today Show, and that the spokespersons also promoted the ADT Plus in what appeared to be independent reviews on their own websites and in blog posts, and other online materials. 

The FTC claimed that ADT scheduled the media interviews through its public relations firms and booking agents, often providing reporters and news anchors with suggested interview questions and background video (b-roll). The paid spokespersons would be identified on air as experts in child safety, home security, or technology and would be interviewed as part of a news segment on a topic related to his or her expertise. During the course of the interviews, the paid spokespersons would demonstrate the ADT Pulse and provide a favorable review of the product. The FTC found that, in most of these media appearances, there was no mention of any connection between the paid spokespersons and ADT. According to the FTC, in certain instances, the spokesperson also demonstrated other safety products adding to the impression that the spokesperson as providing an impartial, expert review. 

Under the settlement, ADT agreed that it would:

  1. not misrepresent that a discussion or demonstration of a security or monitoring product or service was an independent review provided by an impartial expert; 
  2. clearly and prominently disclose any material connection between an endorser and ADT (if done orally, the required disclosures must be delivered in a volume and cadence sufficient for ordinary consumers to hear and comprehend); and 
  3. remove any demonstration, review, or endorsement by an endorser with a material connection to ADT of any security or monitoring product or service currently viewable by the public that did not meet these standards.

Most importantly, under the settlement, ADT must provide each endorser with a clear statement of his or her responsibility to “clearly and prominently” disclose, in any television appearance, blog posting, or other communication, the endorser’s material connection to ADT, and ADT must obtain from each of its endorsers a signed and dated statement acknowledging receipt of that statement and expressly agreeing to comply with it.

ADT also must establish a system to monitor and review the representations and disclosures of endorsers with material connections to ADT, including at a minimum monitoring and reviewing these endorsers’ television and radio appearances, websites, and blogs.  

The settlement agreement further requires that ADT “[i]mmediately” terminate and cease paying any endorser if it reasonably concludes that an endorser has misrepresented, in any manner, his or her independence and impartiality or has failed to clearly and prominently disclose a material connection between the endorser and ADT.


The Bottom Line

The FTC’s settlement with ADT reminds advertisers to inform endorsers about their responsibilities to clearly and prominently disclose their material connection, to monitor their endorser’s compliance, and to terminate those endorsers who fail to make these required disclosures. To the extent advertisers are not doing so already, they should take steps to monitor their paid endorsers to help to ensure that they are complying with the FTC’s Guides Concerning Use of Endorsements and Testimonials in Advertising. Advertisers must consider adding to their endorser’s contract, if they have not already done so, the endorser’s obligation to make the necessary disclosures and that the failure to do so may result in termination of the contract.