Markets Wired

The defendants in a scheme that charged Spanish-speaking consumers for unordered or defective products and made it costly or practically impossible for them to get their money back are banned from telemarketing and selling weight-loss products under a settlement with the Federal Trade Commission.

“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.”

According to a complaint the FTC filed in June 2014, the Hispanic Global Way defendants used Spanish-language television ads and Peruvian call centers to sell its products. They then shipped incomplete orders, the wrong or defective products, products of the wrong size or color, and products that did not perform as advertised, including a phony weight-loss belt. When consumers called to complain, telemarketers either ignored or insulted them, or told them they could not return or exchange products, or that they would have to pay a fee, ranging from $20 to $299, to do so. Those few consumers who were promised refunds or exchanges found they never materialized. A federal judge halted the operation and froze the defendants’ assets, pending litigation.

The settling defendants have admitted to the allegations and agreed to be banned from telemarketing or selling weight loss products. Under the settlement order, in any future business they must provide refunds or exchanges, free of charge, for incorrect or non-working products, for any program that differs from what was advertised, and when consumers don’t receive gifts promised as an inducement for a purchase.

The defendants are also barred from making material misrepresentations about goods and services and must disclose, before making a sale, any restriction or condition on a refund, cancellation, repurchase, or exchange. They are also prohibited from profiting from, and failing to properly dispose of, customers’ personal information obtained in this case.

The settling defendants are Rafael Martin Hernandez, Maria Gisella Carrasco, Maria Elizabeth Vera, 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, and Fast Solutions Plus Corp. The FTC is seeking default judgments against Grand Team Service Corp. and Roberto Carrasco Macedo.

The settlement order imposes a $50 million judgment that will be suspended upon surrender of all of the defendants’ significant assets, including Carrasco’s North Miami house, U.S. and Peruvian bank accounts, and jewelry; a 2010 Mercedes Benz owned by Hispanic Way; and a life insurance policy and U.S. and Peruvian bank accounts owned by Hernandez.

The Commission vote authorizing the staff to file the stipulated order for permanent injunction and monetary judgment was 5-0. The U.S. District Court for the Southern District of Florida entered the order on February 25, 2015.

NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.