WASHINGTON — ADT has settled charges made by the Federal Trade Commission (FTC) that the home security giant allegedly paid safety and technology experts to demonstrate and review its home monitoring system while appearing on national television and other media outlets without disclosing financial agreements.
The FTC accused ADT of paying three people, including a child safety expert, a home security expert and a technology expert, more than $300,000 to endorse the firm’s Pulse monitoring system during television and radio news programs and talk shows, as well as in blogs and other online material. The endorsements included an appearance by a spokesperson three years ago on NBC’s “Today” show.
One person received more than $200,000, while the other two individuals’ compensation included free ADT Pulse security systems valued at $4,000, plus free monthly monitoring, according to an FTC press release.
ADT hired a public relations firm and booking agents to set up media interviews for the three people, who participated in 40 different promotional settings without disclosing their financial ties as required by consumer protection laws.
As part of the settlement, ADT is prohibited from misrepresenting that any discussion or demonstration of a security or monitoring product or service is an independent review provided by an impartial expert. It must also make clear and prominent disclosures about any relationship between an endorser and the company.
FTC also requires that ADT 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.
An ADT representative, Elise Askenazi, told SSI in an E-mail that the firm is working diligently to comply with FTC’s terms.
“ADT has a tough disclosure policy that follows the FTC endorsement guidelines,” she wrote. “That’s why we are happy to have resolved the matter amicably, and why we are willing to commit publicly to maintain that policy.”