Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC settles action alleging product scam targeting Spanish-speaking consumers, (Mar 2, 2015)

By Dan Selcke, J.D.

The FTC has entered a stipulated settlement with the Hispanic Global Way and related entities for allegedly charging Spanish-speaking customers for defective or unordered products and making it nearly impossible for them to receive refunds, the agency announced. Under the settlement order, filed in the federal district court in Miami, defendants are banned from telemarketing or selling weight-loss products, must offer free refunds for products they sell in the future, and are subject to a monetary judgment (FTC v. Hispanic Global Way, Corp., February 26, 2015, Altonaga, C.).

The settling defendants include Hispanic Global Way Corp., Hispanic Global Way LLC, Hispanic Global Way Venez Corp, Hispanic Global Way Venez 1 Corp, Gold Lead USA Corporation, Sky Advance Choices Corp., Sky Advance LLC, First Airborne Service Trading Corp, Hispanic Network Connections LLC, Fast Solutions Plus Corp., Rafael Martin Hernandez, Maria Gisella Carrasco, and Maria Elizabeth Vera.

According to the FTC’s complaint, these defendants sold their products through Spanish-language television ads and Peruvian call centers. Many of the products they shipped did not match what the customer ordered or were defective in some way. When customers called to complain, the telemarketers ignored them, insulted them, or told them they could not return or exchange products, the agency claimed. If an offer to return or exchange was extended, the telemarketers allegedly said that it only could be done for a hefty fee. Those few customers who were promised refunds or exchanges found they never received them.

Under the settlement order, the defendants are banned from selling or marketing weight loss products. Also, they must provide free refunds or exchanges for any incorrect or defective products they sell in the future, and disclose to customers any restrictions on refunds or exchanges prior to making the sale. The order imposes a $50 million judgment on the defendants, which will be suspended upon surrender of select assets.

“The FTC is on the lookout for scams that rip off consumers in every community,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “This case serves as a warning to would-be scammers that targeting Spanish speakers is not a means to fly under the FTC’s radar.”

News: ConsumerProtection FederalTradeCommissionNews