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ATTORNEY GENERAL THURBERT BAKER ANNOUNCES SETTLEMENT WITH TERMITE BAIT MANUFACTURER THAT MADE UNSUBSTANTIATED ADVERTISING CLAIMS

PRESS ADVISORY

ATTORNEY GENERAL THURBERT BAKER ANNOUNCES SETTLEMENT WITH TERMITE BAIT MANUFACTURER THAT MADE UNSUBSTANTIATED ADVERTISING CLAIMS

March 18, 1999

ATLANTA - Attorney General Thurbert Baker, in conjunction with the Governor's Office of Consumer Affairs, announced today that Georgia has joined a multistate settlement with United Industries Corporation of St. Louis, Missouri to settle government charges that the company made unsubstantiated advertising claims for its Spectracide Terminate termite bait system. Spectracide Terminate, touted as the first "do-it-yourself" termite defense system, is sold through home improvement stores such as Lowe's and Home Depot.

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

"I will not allow unscrupulous companies to victimize Georgia's consumers with false advertising claims. When false claims are being made, we will take forceful action to stop the fraudulent advertising and obtain refunds for consumers who have been victimized," Baker said.

As part of the settlement announced today, United Industries will make a full refund to any consumer who is dissatisfied with their purchase of Spectracide Terminate and who seeks a refund within fifteen months of purchase. Consumers may send refund requests, with proof of purchase, to:

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

Proof of purchase includes any one of the following: (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, (5) a warranty card that has not been previously returned to the company.

The company will also pay $40,000 each to Georgia, eight other states and the District of Columbia as compensation of investigatory and litigation expenses. In settling the case, United Industries has not admitted liability or wrongdoing.

On October 15, 1998, Baker, seven other state Attorneys General and the Federal Trade Commission filed suit against United Industries in U.S. District Court in Baltimore charging that United Industries' advertising claims for Spectracide Terminate violated state and federal consumer protection laws. The lawsuit claimed that United Industries did not have substantiation for its claims that the use of Spectracide Terminate alone was effective in preventing termite infestations and damage to homes and that it would eliminate active termite infestations.

A trial began in U.S. District Court in Baltimore on January 4, 1999, but was halted the next day when the parties informed the court that United Industries had agreed to settle the case. The settlement announced today is being submitted to the court for approval.

During 1998, United Industries advertised Spectracide Terminate on television, in newspapers and magazines, 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 that 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.