What Made News?
The FTC is cracking down on misleading endorsements in
advertising, and the home security company ADT has the lumps to
prove it. Earlier this month, ADT settled FTC charges that it had
deceived consumers by failing to disclose that
"independent" security experts were in fact paid ADT
spokespeople.
Background on the FTC Endorsement Guides
The FTC recently issued revised guidelines that govern the use of
endorsements in advertising (the Guides). The Guides set out the
general principles that the FTC uses to evaluate whether
endorsements will be considered deceptive and therefore illegal
under Section 5 of the FTC Act. Specifically, the Guides note that
endorsements must reflect the honest opinions and experience of the
endorser and that advertisers must disclose any "material
connections" between the endorser and the seller of the
advertised product. When such a connection exists, for example if
the endorser is being paid by the advertising
