03/19/99 - FTC Settlement Offers Refund for Terminate (termite bait) Customers

WASHINGTON, D.C. As part of a settlement announced today, March 18, 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 do-it-yourself 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."

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, Md.

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, Mo.-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."

The complaint alleges that United Industries did not have adequate substantiation to support certain challenged claims. For example, in the complaint, 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: "The company implies that use of Terminate requires only that users place bait stakes in the ground around their home and Terminate does the work. In fact, the use of the product requires the consumer to inspect the bait stakes every two to three months, or more frequently where termite infestation is heavy or suspected; add additional stakes if termite activity exists; and replace or remove all stakes every nine months." The company implies that Terminate is a do-it-yourself method of killing termites that damage homes. According to the complaint, the company has failed to disclose that bait stakes do not work against drywood termites and that PCOs are recommended for homes with active infestations or in areas with drywood or Formosan termites.

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. Also, according to the FTC, in any promotions that claim Terminate kills termites, the company will include the statement "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.

The stipulated final order requires United Industries to pay the District of Columbia and the nine states $40,000 each for investigation and litigation expenses.

FTC News Release on the Settlement


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