For Release: April 27, 2004
FTC Announces Hispanic Law Enforcement and Outreach Initiative Designed to Stop
Deceptive Advertising and Other Scams Aimed at Hispanic Consumers
The Federal Trade Commission today announced its Hispanic Law Enforcement and
Outreach Initiative to address the growing problem of deceptive advertising aimed at Spanish-speaking consumers. The Initiative encompasses traditional law enforcement actions and
consumer outreach. In addition, on May 12 and May 13, 2004, the FTC and the Department of
Justice's Office for Victims of Crime are hosting workshops to explore best practices for outreach
and coordinated law enforcement.
"The Commission is dedicated to a strong enforcement presence in areas affecting the
Hispanic community," said Howard Beales, Director of the FTC's Bureau of Consumer
Protection. "Our research shows that Hispanics are more likely than non-Hispanic
whites to be victims of consumer fraud."
Law Enforcement Actions
In 2003, the Commission initiated the Spanish Language
Media Monitoring Project to review Spanish language ads on television, radio,
the Internet, and in print to identify deceptive advertising for law enforcement
actions. As a result of the Project, the FTC is announcing seven matters against
allegedly deceptive marketing advertised in high circulation Spanish language
magazines, on national cable television channels, or in newspapers. These cases
cover a variety of products and services including work-at-home business opportunities,
weight-loss products, junk computers, and fraudulent international driving
permits.
Paymentech Promotions
The Commission filed a complaint in the U.S. District Court for the Southern District of
Texas against Estaban Barrios Vega, doing business as EBV Promotions, Paymentech
Promotions, and Promotions of Service, alleging violations of the FTC Act and the Telemarketing
Sales Rule (TSR). According to the complaint, the defendant advertised work-at-home business
opportunities in various Spanish-language newspapers and circulars. According to the FTC, few,
if any, consumers who paid up to $149 received the promised work, and realized the earnings the
defendants claimed. On April 15, 2004, the Commission obtained a temporary restraining order,
ordering the defendant to stop his deceptive advertising and freezing the defendant's assets. On
April 23, 2004, the court granted the FTC a preliminary injunction banning the defendants from
telemarketing and selling business opportunities. It also continues the asset freeze. The FTC
received assistance in its investigation from the U.S. Postal Inspection Service in Houston, Texas.
American Dream Enterprises
On April 16, 2004, the Commission
filed a complaint in the U.S. District Court for the Southern District of
Florida against American Dream Enterprises, LLC and its owner, Andres Fernandez-Salvador.
The Miami-based defendants advertised a weight-loss dietary supplement called "Fat Seltzer," which,
when added to water, produces bubbles. According to the complaint, the defendants
claim that the effervescent action, when combined with Fat Seltzer's ingredients,
produces substantial and permanent weight loss without the need to diet or exercise.
These claims are the type that the FTC staff report, Red Flag: Bogus Weight Loss Claims, identified as
scientifically unfeasible.Latin Hut
The FTC filed a complaint and
stipulated final order on April 22, 2004, against Latin Hut, Inc., doing
business as Maya Sales Corporation, in the U.S. District Court for the Southern
District of California. The Commission alleged that the defendant, based
in San Diego, deceptively marketed a weight-loss patch, "Parche Para Bajar Peso"; a "fat absorber" dietary
supplement, "Iman De Grasa"; and "Total Bust," a breast augmentation dietary
supplement. According to the complaint, advertisements for the two weight-loss
products falsely claimed that they cause substantial weight loss. In addition,
the complaint alleges that ads for Total Bust deceptively claimed that the product
can increase breast size and change the appearance of users' breasts. The order
settling the charges prohibits the defendant from making similar claims in the
future and requires it to pay $149,425 in consumer redress.
Heritage Health Products
The FTC filed a complaint and
proposed stipulated final order against Heritage Health Products Company,
a Fort Collins, Colorado-based company for allegedly marketing a product
containing shark cartilage - known in Spanish as "cartílago de tiburón" - using deceptive disease-treatment claims for lupus, herpes, rheumatoid arthritis, cancer, and other serious illnesses and
conditions. In addition, the Commission's complaint alleged that the defendant deceptively
marketed its Cat's Claw product - known in Spanish as "Uña de Gato" -
as an effective treatment for serious illnesses and conditions, including Crohn's
Disease, AIDS, and cancer. The proposed order prohibits Heritage from making
deceptive disease treatment claims for shark cartilage, Cat's Claw, or certain
other products.
The complaint and proposed stipulated final order for permanent injunction were filed in
the U.S. District Court for the District of Colorado in Denver, on April 16, 2004.
Unicyber Technology
On March 4, 2004, the FTC filed a complaint in the U.S. District Court for the Central
District of California against Unicyber Technology, Inc.; Unicyber Gilboard, Inc.; and Chul K.
Han, for allegedly targeting Spanish-speaking consumers with an offer of a complete computer
system for three payments of $199. Instead of delivering the entire computer at the time the first
payment was made, Unicyber allegedly delivered only keyboards and parts that would be useless
without the computer itself. Consumers then learned that they would not receive the full
computer until they sent more money. Those who made the payments allegedly ended up with
computers that did not work.
On March 12, 2004, the court issued a temporary restraining order halting the defendants'
business practices and freezing their assets. On March 19, 2004, the defendants agreed to a
preliminary injunction that prohibits them from making misrepresentations about computer
systems or other products, continues the asset freeze, and appoints a receiver. On March 30, the
original complaint was amended to name two additional corporate defendants, URI Technology,
Inc. and URI Communications, Inc. Litigation is ongoing.
PT Resource Center
On January 8, 2003, the FTC filed a complaint in the U.S. District Court for the District of
Massachusetts against William Scott Dion, and Donald and Vivian Lockwood, all doing business
as PT Resource Center and PTRC. According to the Commission's complaint, the defendants
marketed bogus international driving permits (IDPs) and related identification cards on their
website to immigrants and others for $65 or more.
On April 5, 2004, the court entered a default judgment against the Lockwoods banning
them from the business of IDPs and requiring them to pay full consumer redress of $88,671.55.
The proposed stipulated final order against Dion, filed on April 27, 2004, likewise bans
him from the business of IDPs and prohibits him from making future misrepresentations. Both the
default judgment and the stipulated final order contain provisions to assist the FTC in monitoring
defendants' compliance.
Alternative Medical Technologies, Inc.
The FTC filed a complaint and
stipulated final order on April 27, 2004 in the U.S. District Court for the
Southern District of Florida against Alternative Medical Technologies, Inc.
and Jose Fernandez, AMT's principal owner. The complaint alleges that the
defendants falsely claimed that their weight-loss supplement, "X-TOX 10," causes substantial weight loss without the need to
diet. In addition, the complaint alleges that the defendants made deceptive claims for their
smoking cessation product, "X-TOX 80." The proposed order prohibits the defendants
from making similar claims in the future.
The Commission vote on all these matters was 5-0.
Outreach
The FTC's Hispanic Initiative includes a significant outreach component that includes
making consumer information available in Spanish, distributing radio public service
announcements in Spanish, providing consumer news to the Spanish-language media, and building
partnerships with organizations, businesses, and leaders in the Hispanic community.
The FTC wants to hear from Spanish speakers who want to get information about consumer
rights or complain about consumer fraud. The agency's objective is to let Spanish speakers know
how they can identify and avoid fraudulent and deceptive practices and where they can report
them.
To date, the FTC has translated
nearly 70 consumer publications and posted them to the FTC's En Español
Web site at www.ftc.gov/spanish.
Among the subjects the publications cover are identity theft, fair debt collection,
abusive lending practices, and job scams. Since January 2002, the FTC has
disseminated nearly 500,000 Spanish-language consumer publications and logged
more than 600,000 accesses to the Spanish-language information on its Web
site.
Hispanic Outreach Forum and Law Enforcement Workshop
On May 12 and May 13, 2004, the FTC and the Department of Justice's Office for
Victims of Crime are hosting workshops to explore strategies on effective and high impact
education for the Hispanic community and ways for federal, state, and local law enforcement
officials to collaborate to deter and stop fraud targeted at Hispanics.
The Hispanic Consumer Outreach Forum, which will be held on May 12, 2004, from
12:45 p.m. to 5:00 p.m., will explore the makeup of the Hispanic market, share best practices for
consumer education, and provide effective fraud prevention messages for the Hispanic
community. On May 13, 2004, from 9:00 a.m. to 5:00 p.m, the Law Enforcement Workshop will
explore which consumer frauds commonly affect the Hispanic community and consider new
approaches to stopping those frauds and assisting victims.
Both workshops will be held at the FTC's Conference Center at 601 New Jersey Avenue,
N.W., Washington, D.C. They are free and open to the public, and there is no pre-registration.
More information on these workshops is available at:
www.ftc.gov/bcp/workshops/hispanic/index.htm
NOTE: The Commission
files a complaint when it has "reason
to believe" that the law has been or is being violated, and it appears to the
Commission that a proceeding is in the public interest. The complaint is not
a finding or ruling that the defendant has actually violated the law. The case
will be decided by the court.
NOTE: These stipulated final orders are for settlement purposes only and do not constitute an
admission by the defendants of a law violation. Stipulated final orders have the force of law when
signed by the judge.
Copies of the complaints and stipulated final orders announced today are
available from the FTC's Web site at http://www.ftc.gov and
also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue,
N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent,
deceptive, and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them. To file a complaint
in English or Spanish (bilingual counselors are available to take complaints),
or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1 877-382-4357), or use the complaint format http://www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft, and other fraud-related
complaints into Consumer Sentinel, a secure, online database available to hundreds
of civil and criminal law enforcement agencies in the U.S. and abroad.
MEDIA CONTACT:
Brenda Mack
Office of Public Affairs
202-326-2182
STAFF CONTACTS:
Laura Koss
Bureau of Consumer Protection
202-326-2890
(Coordinator for the Spanish Language Initiative)
Gregory Ashe
Bureau of Consumer Protection
202-326-3719
(Paymentech Promotions)
Edwin Rodriguez
Bureau of Consumer Protection
202-326-3147
(American Dream Enterprises)
Laura Koss or Robin Richardson
Bureau of Consumer Protection
202-326-2890 or 202-326-2798
(Latin Hut)
Barbara Anthony or Michael Bloom
FTC's Northeast Region - New York
212-607-2800
(Heritage Health)
Jeffrey Klurfeld or Jennifer Brennan
FTC's Western Region - Los Angeles
310-824-4343
(Unicyber Technology)
Barbara Anthony or Thomas Cohn
FTC's Northeast Region - New York
212-607-2800
(PT Resource Center)
Joni Lupovitz or Hampton Newsome
Bureau of Consumer Protection
202-326-3743 or 202-326-2889
(Alternative Medical Technologies)
(Paymentech: FTC File No. 042 3066; Civil Action No. H-04-1478)
(American
Dream: FTC File No. 032 3193; Civil Action No. 04-CV-20904)
(Latin Hut: FTC File No. 032 3166; Civil Action No. 04-CV-0830-BTM)
(Heritage
Health: FTC File No. 022 3203; Civil Action No. 04-WM-0775 (cbs))
(Unicyber Technology: FTC File No. 032 3186; Civil Action
No. 04-1569 LGB (MANx)
(PT Resource Center: FTC File No. X030019; Civil Action
No. 03-40005-NMG)
(Alternative Medical Technologies: FTC File No. 032 3172; Civil
Action No. not available at press time)
(http://www.ftc.gov/opa/2004/04/hispanicsweep2.htm)
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Related Documents:
List of Past Cases
Federal Trade Commission v. Alternative Medical Technologies, Inc., and Jose Fernandez, (Southern District of Florida)
FTC v. Unicyber Technology, Inc., et al., defendants., U.S. District Court, Central District of California, Western Division, File No.: 032-3186, Civil Action No.: CV04-1569LGB (MANx)
Federal Trade Commission v. William Scott Dion, individually and doing business as PT Resource Center and PTRC, also known as Don Glessner; Donald Lockwood, individually and doing business as PT Resource Center and PTRC, also known as Don Glessner; and Vivian Lockwood, individually and doing business as PT Resource Center and PTRC, Civil Action No. 03-40005-NMG (District of Massachusetts, Central Division)
Federal Trade Commission, plaintiff, v. American Dream Enterprises, LLC, and Andres Fernandez Salvador, defendants., United States District Court for the Southern District of Florida, Civil Action No.: CIV-04-20904
Federal Trade Commission, Plaintiff v. Heritage Health Products Company a Colorado Corporation Defendant., In the United States District Court for the. District of Colorado, Civil Action No.: 04-WM-0775 (CBS)
Federal Trade Commission, plaintiff, v. Latin Hut, Inc., also d/b/a Maya Sales Corporation, defendant., United States District Court For the Southern District of California, Civil Action No. 04-CV-0830- BTM (RBB)
Federal Trade Commission, Plaintiff, v. Esteban Barrios Vega, an individual doing business as EBV Promotions, Paymentech Promotions, and Promotions of Service, defendant., United States District Court for the Southern District of Texas Houston Division, Civil Action No. H-04-1478
Consumer Information:
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