If you've watched the news recently, it's fairly safe to predict that two things happened. First, you probably watched an announcer recount disturbing news about the current political climate. Second, following that segment, you probably watched a celebrity recount the benefits of using CarShield. (If your experience is different than mine, please let me know, so that I can change my viewing habits.) Although both of those things may continue to happen for a while, you may soon see some changes to the CarShield commercials.
Last week, the FTC announced a proposed settlement with CarShield over allegations that the company had made misleading claims about what its vehicle service contracts cover, misrepresented that consumers could get their cars repaired at the shop of their choice, violated the Telemarketing Sales Rule, and used deceptive endorsements. That's a lot – and it helps to explain the $10 million price tag on the settlement – but for this post, we're just going to focus on the endorsement issues.
CarShield used a number of celebrities – including Ice-T, Vivica A. Fox, Adrienne Janic, and Ernie Hudson – to promote its service contracts. In some commercials, the celebrities simply talked about how CarShield works. In other commercials, though, the celebrities also talked about their personal experiences with the company's services. For example, in one commercial, Ice-T says that he protects his own cars with CarShield and that CarShield helps get repairs covered "so I don't have to."
According to the FTC's complaint, though, the celebrities that claimed to be CarShield customers in the commercials were customers only "nominally." Although the celebrities had vehicle service contracts with the company, some of them never used those contracts to cover repairs. In other cases, the celebrities that did use CarShield for repairs were treated as "preferred customers" by the company and got repairs approved "that would not have been approved for a typical consumer."
In addition to using celebrity endorsers, many commercials featured consumer endorsers talking about their experience with the company and how much money they saved. For example, in one commercial, a consumer states: "I've been a CarShield customer for close to seven years, had three vehicles covered, and they saved me close to $9,000." According to the FTC's complaint, a number of those consumers never saved the amounts of money they claimed.
Among other things, the settlement prohibits CarShield from mispresenting that a person has used the company's services if that person hasn't and from mispresenting a person's experiences with those services. That's no surprise and is consistent with other settlements in this area. For example, take a look at our post about a FTC and state AG settlement over allegations that Google paid iHeartMedia DJs to talk about their experiences with phones they had never actually used.
If you work with celebrities, influencers, or consumer endorsers, this settlement holds some lessons for you. If you provide scripts or talking points for your endorsers, make sure you have cleared all claims and that you aren't asking the endorsers to talk about personal experiences they haven't had. And if you're reviewing content provided by endorsers, make sure you can substantiate any claims they make and that those claims represent what consumers are likely to experience with your product or service.
Maybe that's what Ice-T was thinking about when he wrote this in his memoir: "Just be yourself. Just be you, dog. The easiest way to get your card plucked around a gangster is to be a fake." (Polonius said something similar in Act I, Scene 3 of Hamlet.) Or maybe Ice-T was thinking about something else. Either way, there's probably some good advice there. Being fake can have consequences, ranging from getting your card plucked to paying millions of dollars.
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