ADT Agrees to Reveal whether it Paid Experts to Boost Service
March 6th, 2014
A national home security company has agreed to stop misrepresenting paid endorsers as independent reviewers as part of a settlement the FTC announced Thursday. The endorsers appeared as experts on NBC’s “Today Show” as well as on dozens of other radio and talk show programs across the country and praised ADT’s Pulse security system.
The FTC charged that the company failed to disclose that it was paying the experts to promote the security system. The FTC said the Florida-based company shelled out more than $300,000 to pay three spokespersons, including a technology expert, a home-security expert and a child-safety expert, to plug the system on the air and in blogs and other online material. Two of the experts also received a free system and free monthly monitoring services. The paid spokespeople were introduced in the media as experts usually with no mention of any connection to ADT, the FTC said.
“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 in a press release.
One of the experts, Alison Rhodes, in an appearance three years ago on the “Today” with hosts Kathie Lee Gifford and Hoda Kotb as “The Safety Mom” said of ADT’s system: “It’s amazing” and discussed how it could save consumers money on their homeowner’s insurance.
As part of the settlement, ADT will “clearly and prominently disclose a material connection” to a paid endorser and provide the endorser with a statement of their responsibility to disclose their connections to the company.
TINA.org has reached out to both NBC and ADT for comment. Check back for further updates.
More information about reviews can be found here.
Established in 1914 under President Woodrow Wilson, the FTC is the United States government’s primary regulatory authority in the area of consumer protection and anti-competitive business practices in the marketplace. Its Bureau of Consumer Protection assumes the lead in the Commission’s efforts to eliminate deceptive advertising and fraudulent business practices at work in the economy.