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Paid Sponsor Posing as Expert is Caught Plugging ADT Security Products on TV: Against the Law?

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January 13, 2012
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Paid Sponsor Posing as Expert is Caught Plugging ADT Security Products on TV: Against the Law?

I was  just a small child during the original “Payola” scandals of the 1950’s, but do recall the more recent FCC (Federal Communications Commission) charges of the last decade that resulted in music, cable and radio companies paying fines totaling almost $50 million for violations of those same laws. And now it appears that paid sponsors are exploiting the airwaves in a way that may be illegal – such as the "stealth ads" from one individual who is actually compensated by a certain (very) large US alarm company, with a name that consists of three letters...

Alison Rhodes is passionate about child safety, and in hundreds of TV news interviews, the self-styled “Safety Mom” has talked up products designed to increase it. During a segment on WTTG’s morning news last year, for example, Rhodes showed off a home electronic monitor made by ADT and a backpack with a built-in alarm known as the iSafe bag. “It’s amazing,” she gushed to Fox5 host Tony Perkins about the backpack. “It really is amazing.”

Here’s the Catch – and the Violation

What neither Rhodes nor WTTG mentioned to viewers was this: the companies Rhodes mentioned on the air had paid her to plug their products. In effect, Rhodes’s appearance was a kind of stealth commercial dressed up as a traditional product-review interview. Such product-friendly segments aren’t just potentially deceptive; they’re illegal, under a federal law that prohibits “payola” or “plugola,” as the practice is commonly known.

What the Law Requires

Rhodes is one of a small army of hosts and reviewers of fashion, toys, electronic gadgets and other consumer-oriented topics who pop up on morning news shows with advice about what to buy. The advice almost always involves products from companies that have paid the expert to slip in a few favorable words. The disclosures about this arrangement can range from minimal to nonexistent. Satellite technology makes it possible for these experts to beam into dozens of cities in a single day.

Did She Disclose?

A few weeks after her appearance on WTTG, Rhodes was on the “Today” show, talking about the same products she spoke about on Fox5. NBC and Fox5 say they were unaware of any of Rhodes’s commercial connections at the time of her appearances. Both broadcasters say they strictly disclose all sponsor affiliations to viewers when a guest appears on a news program.

Is She Credible – And Is it Legal?

Rhodes sees no issue in accepting payment for her recommendations because, she says, her enthusiasm is genuine. ADT’s home-security monitor, for example, is “something I really believe in and use . . . I’m not going to take on any engagement with a client unless I believe in their product,” she says. But that’s not how the federal government sees it. Under federal law, anyone who receives something of value to endorse a product must disclose that fact to a broadcaster, which is then required to inform its audience. Failure to do so can bring a fine of up to $10,000 and a one-year prison sentence.

Of course, we thinks it's great when credible sources raise awareness about home security. But, as you may have learned by reading my posts, there are already enough scams in the alarm industry. From high pressure door knockers using fraudulent practices, to burglars pretending to be alarm sales representatives, there is plenty for consumers to watch out for. This latest example of pushing the ethical and legal envelope is disappointing, but hardly surprising.

FrontPoint prides itself on transparency, starting with how we market our products and services. Everything you might want to know is on our web site, and you can even research, design, and order and set up your own FrontPoint protection without a call or on-line chat. The fact is, most of our customers do want to talk before they buy, and we like that: it give us an opportunity to answer any and all questions, guide the design process, and explain the many FrontPoint advantages – like our risk-free 30-day trial. With this consumer-friendly approach, and peace of mind that is safer, smarter, simpler, more affordable, and virtually impossible to defeat, it’s easy to see why FrontPoint is the leader in wireless home security – and the #1 ranked alarm company in the US.

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