As part of a settlement announced today by the Federal Trade Commission, the District of Columbia and nine Attorneys General, United Industries Corporation has agreed to make refunds to consumers and to modify its advertising for TERMINATE -- a termite bait system. The stipulated final order filed in U.S. District Court settles allegations made in a complaint filed on October 15, 1998, that the company's claims about the use and effectiveness of TERMINATE are deceptive and lack adequate substantiation.
"Fortunately, the consumers who took the bait about this product have an opportunity to get their money back," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "Termites cause serious damage and consumers spend serious money trying to deal with it. This settlement sends a message to all advertisers to represent their products truthfully and accurately. Consumers expect it and the law requires it."
TERMINATE, which is manufactured and distributed by United Industries Corporation, is sold through national home improvement stores and regional chains. According to the complaint, the St. Louis, Missouri-based company promoted its termite bait system, which sells for $60 to $100, in advertising and other promotional materials as "the first do-it-yourself termite home defense system."
In addition to the FTC and the District of Columbia, the Attorneys General of Florida, Georgia, Kentucky, Maryland, Ohio, New Jersey, North Carolina, Texas, and Virginia joined in filing the complaint in U.S. District Court in Baltimore, Maryland.
The complaint alleges that United Industries did not have adequate substantiation to support certain challenged claims. For example, in the complaint, the federal and state officials allege that the company's materials about TERMINATE imply, without substantiation, that use of the product alone is effective in preventing termite infestations and damage in homes, that it is effective in eliminating active termite infestations in homes, and that TERMINATE is as effective or more effective than chemical barrier treatments in preventing termite infestations and damage in homes.
The complaint also alleges that in advertising and promotional materials:
As part of the settlement, United Industries will not make any claims about the effectiveness of TERMINATE unless it has reliable scientific evidence to support those claims. The company also will disclose in any advertisements or promotional material that claim that TERMINATE kills termites that the product is "Not recommended as sole protection against termites, and for active infestations, get a professional inspection."
In addition, any consumer dissatisfied with TERMINATE may seek 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 a warranty registration card on file at the company; return of the product box; return of the stake insertion tool; a purchase receipt; or a warranty card that was not returned previously to the company.
The stipulated final order also requires United Industries to pay the District of Columbia and the nine states $40,000 each for investigation and litigation expenses.
The Commission vote to file the stipulated final order was 3-0. Commissioner Orson Swindle did not participate for medical reasons. The stipulated final order was filed on March 17, 1999, in U.S. District Court for the District of Maryland.
NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated final orders have the force of law when signed by the judge.
Copies of the complaint and the stipulated final order are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. X990019; Civil Action No. MJG-98-3455)