WASHINGTON, March 6 ADT Corp has settled
with U.S. regulators who accused the home security company of
paying safety experts to endorse its products without disclosing
the arrangement, the Federal Trade Commission said on Thursday.
The commission said in its complaint that Boca Raton,
Florida-based company paid three people a total of about
$313,000 to publicly endorse their product and gave two of them
free security systems.
One of the three, Alison Rhodes, also went on NBC's "Today
Show" to tout ADT Corp's Pulse home monitoring system, without
disclosing the company had paid her, according to the FTC.
In the segment, Rhodes, who operates the website
"SafetyMom.com," said the ADT system was "truly the virtual
babysitter" and could potentially help homeowners save money on
Rhodes and the others appeared to be impartial reviewers of
the ADT system, even though they had been paid, 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, head of the
FTC's Bureau of Consumer Protection.
In the settlement, the FTC required ADT to disclose any
financial relationship between the company and those who endorse
its products in the future.
ADT said it was "happy to have resolved the matter
amicably." Rhodes and NBC representatives did not immediately
respond to a request for comment.
ADT shares dipped 0.2 percent at $31.17 on the New York