ADT Settles FTC Charges Regarding Customer Deception and Misleading Paid EndorsementsPosted By Joshua Unseth
It's no secret that the Home Security industry is full of companies willing to say anything to get you to sign a multi-year contract with them. It's one of the many problematic practices that resulted in the founding of Alarm Grid. It's a practice that nearly every single member of the industry does. When we started Alarm Grid two years ago, and we mentioned that we were going to try this whole thing by treating customers well and not making them sign contracts, we were laughed out of rooms and told that it would never work. Well, here we are two years later: one of the fastest growing security companies in the United States.
The industry incumbents aren't any better, unfortunately. Over the last year, we've seen tons of home security scams where companies are claiming to be ADT or another known security brand and tricking customers into signing up. Rightly, most of the brands whose names are being misrepresented are working hard to make sure that those companies are squelched. That said, if ADT thinks that tricking customers is such a bad idea, then why is it that they were just found reprimanded by the FTC for misrepresenting their advertisements by paying for spokespeople to discuss their product glowingly?
In the FTC's release, they wrote the following:
As part of its ongoing crackdown on misleading endorsements in advertising, the Federal Trade Commission has charged the home security company ADT LLC with misrepresenting that paid endorsements from safety and technology experts were independent reviews. Under an agreed-upon settlement, ADT is prohibited from misrepresenting paid endorsements as independent reviews in the future....
“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 Federal Trade Commission’s Bureau of Consumer Protection. “When a paid endorser appears in a news or talk show segment with the host of that program, the relationship with the advertiser must be clearly disclosed."
While we find the practice of undisclosed paid endorsements reprehensible - especially when these endorsement deals are hundreds of thousands of dollars - it's unfortunately commonplace in this industry. You don't have to look too far online to find a company or two that always shows up at the top of what looks like a legitimate resource for consumers doing research on systems.
We find it odd that companies like ADT who go far to try to keep other companies from dragging their name through the mud (they offered $20,000 bounties for footage of companies training their employees to do what we described at the beginning of the article), would turn around and disrespect consumers in the same way.
You will never find Alarm Grid faking reviews. Every Alarm Grid review online is 100% real. It is common for us to ask customers to leave those reviews, but they do it without any compensation. Our on-site testimonials, as we've stated numerous times before, are given to us in exchange for a free month of monitoring, but only after a client has worked with us for at least 6 months. But that's it. If you find our name on a blog, or on some rating site, we will very clearly disclose if we paid for it to be there - you have our word.