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Termite Bait Manufacturer Agrees to Court Order Prohibiting Unsubstantiated Advertising Claims

Thursday, March 18, 1999

Termite Bait Manufacturer Agrees to Court Order Prohibiting Unsubstantiated Advertising Claims

Corporation Counsel John M. Ferren announced today that the District of Columbia, Maryland, Virginia, seven other states, and the Federal Trade Commission have reached an agreement with United Industries Corp. of St. Louis, Missouri, to settle government charges that the company has made unsubstantiated advertising claims for its Spectracide Terminate termite bait system. Spectracide Terminate, touted as the "first do-it-yourself termite home defense system," is sold through Home Depot and Lowe's home improvement stores.

United Industries has agreed to entry of a federal court order prohibiting the company from representing to consumers that Spectracide Terminate is effective in preventing termite infestation or damage in homes, unless the representation is substantiated by reliable scientific evidence. In addition, advertisements claiming that the product kills termites will have to disclose: "Not recommended as sole protection against termites, and for active infestations, get a professional inspection."

"District residents need to be protected from deceptive advertising claims," Corporation Counsel Ferren said. "We will be monitoring the marketplace closely, and we are prepared to bring more court actions to enforce our consumer protection laws." Enforcement of the District's consumer protection law by the Department of Consumer and Regulatory Affairs was suspended by the DC Council in 1995. However, the suspension does not affect the authority of the Corporation Counsel to bring consumer protection cases.

As part of the settlement announced today, United Industries has agreed to provide a refund to any consumer who is dissatisfied with their purchase of Spectracide Terminate and who seeks a refund within 15 months of the purchase. Consumers may send refund requests, with proof of purchase, to United Industries at:

Consumer Services Department
Attn: Karen Holder
United Industries Corporation
8494 Delport Drive
St. Louis, MO 63114

Proof of purchase includes (1) a warranty registration card on file at the company, (2) return of the product box, (3) return of the stake insertion tool, (4) a purchase receipt, or (5) a warranty card that was not previously returned to the company.

The company will also pay $40,000 each to the District of Columbia and to the states of Florida, Georgia, Kentucky, Maryland, New Jersey, North Carolina, Ohio, Texas, and Virginia as compensation for investigation and litigation expenses. In settling the case, United Industries has not admitted liability or wrongdoing.

On October 15, 1998, the Federal Trade Commission and eight state attorneys general filed an action in US District Court in Baltimore charging that United Industries' advertising claims for Spectracide Terminate violated federal and state consumer protection laws. The lawsuit alleged that the company did not have substantiation for its claims that use of Terminate alone was effective in preventing termite infestations and damage in homes and in eliminating active termite infestations in homes.

On December 15, 1998, the Corporation Counsel of the District of Columbia and the Attorney General of Ohio filed a similar action in the same federal court, and the two actions were consolidated the following week. A trial began on January 4, but was halted the next day when the parties informed the court that they had reached an "agreement in principle" to resolve the case. The settlement announced today has been submitted to the court for approval.

During 1998, United Industries advertised Spectracide Terminate on television, in newspaper and magazine ads, and in point-of-sale brochures. An advertisement appearing in Time magazine on June 9, 1998 stated:

TAKE TERMITE PROTECTION INTO YOUR OWN HANDS.

Introducing the first do-it-yourself termite home defense system.

Now there's a whole new idea in termite protection. New Spectracide TERMINATE.™ So effective, it kills subterranean termites in the ground where they live. So they don't reach where you live. Each package comes with everything you need - termite protection stakes plus an insertion tool. Spectracide TERMINATE makes protecting your home easy. And for the first time ever, leaves it up to you.

A television advertisement aired in 1998 stated:

Voice Over:       To you it's your castle.
Sound Effect:     [Crunching, chewing sounds.]
Voice Over:       To millions of termites, it's an all you can eat buffet.
Sound Effect:     [Box slams down, crunching sounds come to an abrupt halt.]
Voice Over:       But now there's new Terminate from Spectracide.
The first ever do-it-yourself ... termite home defense system.
Before it's too late ... Terminate.

Additional information about the court action and settlement may be obtained from Bennett Rushkoff, Senior Counsel, Office of the Corporation Counsel. He can be reached at (202) 727-3500.