Kinetico Responds to Dateline NBC Report

Feb. 26, 2003

Dear Kinetico Dealer/Owner:

By now you have probably seen or heard about the Dateline NBC segment on scare tactics used by some salespeople in the water treatment business. In particular, Dateline referred to Ed Wise, a former independent West Virginia dealer, doing business as Crystal Clear Water, and the sales tactics employed by him with prospective customers.

Unfortunately, although Dateline "commits" itself to fair and accurate reporting, this particular piece was both misleading and deceptive. I would like to inform you about what actually transpired.

The Wises became one of our independent dealers on July 24, 2001. We received the first consumer complaint regarding Ed and Kimberly Wise’s dealership in late November, 2001. In early December, 2001, we began working with the West Virginia Attorney General’s office regarding a second consumer complaint, almost five months prior to the Dateline hidden camera investigation of Mr. Wise, in late April, 2002.

Due to the increasing number of consumer complaints from Crystal Clear Water’s customers in January, 2002, we sent a notice to Ed and Kimberly Wise on February 18, 2002 to terminate our dealer contract – less than seven months after our relationship began. At the time of the hidden camera videotaping, Ed Wise was not authorized to sell Kinetico equipment. In fact, the investigation of the Wises’ sales practices, and their termination as a Kinetico dealer, occurred several months before the hidden camera investigation by Dateline.

Although Kinetico desired to give our account of the situation, Dateline would not provide Kinetico the opportunity to review the hidden camera videotape of Ed Wise prior to an on-camera interview. Since we would not have been able to prepare a response before going on camera, we felt it was not in the best interest of Kinetico or its dealers to agree to the interview.

At the onset, Kinetico expressed to the Attorney General’s office its commitment to fulfill the reasonable expectations of all West Virginia consumers who purchased a Kinetico product from Crystal Clear Water. This included the unconditional right to rescind their purchases should they so desire.

We want to make it clear to you that despite what the West Virginia Attorney General’s office may have initially stated on camera, after a full investigation the Attorney General determined that "Kinetico did not engage in any direct misconduct in connection with the practices of Crystal Clear Water." This conclusion is found in a public document, on file, with the Attorney General’s office. As a matter of fact, Kinetico was granted a judgment against the Wises in October, 2002, for breach of contract, misrepresentation and damage to our reputation.

Kinetico’s agreement to take these actions "fully resolves any concerns the Attorney General has, or may have had, about Kinetico’s role in this matter." Again, this investigation by the Attorney General’s office and its conclusions about Kinetico’s connection with the sales practices employed by the Wises and Crystal Clear Water are all public information.

Kinetico Incorporated believes we have developed the highest quality water systems. We are proud of the business we have built together with our fine dealer network.

Kinetico adheres to the highest standards of ethical conduct in the operation of its business. We require our independent dealers to adhere to this same standard of conduct. The outrageous sales tactics employed by the Wises and Crystal Clear Water have never been and will never be condoned by Kinetico anywhere in the world. We value our name, our reputation and, most importantly, the relationship we have established with our customers.

Thank you for your continued dedication and support.

Best regards,


Keith R. Tompkins


Source: Kinetico, Inc.