FTC Flexes Muscles: Misleading Endorsements Settlement
Brian Igel
Last week, the Federal Trade Commission (FTC) entered into a settlement agreement with ADT regarding allegations that ADT deceived consumers by misrepresenting paid endorsements from safety and technology experts as independent reviews.
Specifically, the FTC alleged that ADT and its agents booked certain experts on press junkets, such experts demonstrated, reviewed and endorsed ADT products for pay, and that ADT misrepresented the reviews as independently conducted by impartial experts.
As it turns out, these experts appeared in 40+ media outlets and posted blogs and other material online about ADT's product. Under the settlement, ADT is (i) prohibited from misrepresenting in any way, express or implied, that any product discussion or demonstration is an independent review provided by an impartial expert and (ii) required to promptly remove reviews that were not independently provided by an impartial expert or which otherwise fail to disclose material connections between ADT and such experts. Finally, like any other brand, ADT must clearly and prominently disclose any existing material connection between the company and paid experts.
Brand owners: Disclose all of your material connections clearly and honestly. Not only will your customers appreciate your honesty, but you will also steer clear of FTC scrutiny.