The Federal Trade Commission (FTC) would also expect that relationship to be disclosed, as evidenced by its recent settlement with the home security company, ADT LLC (ADT). The settlement resolved FTC's claims that ADT's spokespeople failed to disclose that they were paid spokespeople for ADT when they endorsed ADT Pulse monitoring products on national and local television and radio news programs and talk shows, including on NBC's "Today Show" and on websites, blogs and other online materials. According to the FTC, ADT scheduled the media interviews through its booking agents, often providing reporters and news anchors with suggested interview questions and b-roll footage. Then the paid spokespersons were identified on air as an expert in child safety, home security, or technology and were interviewed as part of a news segment on a topic related to his or her expertise. The FTC claimed that during the course of the interviews, the paid spokespersons provided favorable endorsements of the ADT products but failed to mention their relationship with ADT.
Under the settlement, ADT agreed that it would: (i) not misrepresent that a discussion or demonstration of a security or monitoring product or service was an independent review provided by an impartial expert; (ii) clearly and prominently disclose any material connection between an endorser and ADT; and (iii) take reasonable steps to remove the demonstration, review, or endorsement by an endorser with a material connection to ADT currently viewable by the public that did not meet these standards.
The settlement, however, is noteworthy because of its "compliance" provisions, namely, because it requires ADT to provide each endorser with a clear statement of his/her responsibility to disclose clearly and prominently in any televisions appearance, blog posting or other communication the endorser's material connection to ADT. ADT is also required to implement and maintain a system to monitor and review its endorser's disclosures, including monitoring their television and radio appearances, websites and blogs. Last, ADT must immediately terminate its relationship with any endorsers who misrepresent their impartiality or fail to disclose their material connection with ADT.
The FTC's latest settlement should serve as reminder to all marketers that they need to ensure that their spokespersons are disclosing their material connections (e.g., payments or free products) when endorsing the marketer's products in non-traditional media, such as talk shows, blogs and websites. According to the FTC, it is not enough for marketers to remind their spokespeople about their duty to disclose but marketers should be monitoring their spokespeople's compliance, including their television appearances, blogs and online communications.
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