Curacao stores reach settlement in lawsuit alleging it defrauded low-income people
The Curacao chain of stores agreed to pay $10.5 million for partially settle a lawsuit filed by the California Attorney General’s Office alleging that the company exploited its customer base – largely Spanish-speaking immigrants – through misleading advertising, illegal charges, illegal debt collection and abuse of the petty court system receivables.
State attorneys filed a complaint in 2017 against Curacao’s parent company, Adir International, and its chief executive, Ron Azarkman, accusing the stores of targeting low-income Latinos for years who had no access to traditional sources of credit.
Curacao defrauded these customers, state attorneys alleged, by refusing to sell goods at advertised prices and adding warranties, accessories, installation services, often without the knowledge or consent of the customer. .
When customers fell behind in their payments, Curacao sent debt collectors to “harass” not only them, according to the state lawsuit, but also their relatives and employers. The clients were threatened with lawsuits, arrest and home seizure, according to the lawsuit.
Curacao has frequently sued for overdue debts, filing 250 to 400 small claims lawsuits each month, according to the lawsuit. Because the company previously used an unregistered bailiff who fabricated proof of service, some clients learned that default judgments had been entered against them without an opportunity to defend themselves in court, the company’s lawyers charged. ‘State.
The settlement, announced Tuesday, will set aside $10 million in debt relief for customers in Curacao.
The company will also pay $500,000 in civil penalties and has agreed to post a customer bill of rights in stores, sell items at advertised prices, disclose all contract terms to customers, limit collection of claims to one phone call per day to delinquent customers and to use a licensed process server that uses a GPS tracking system.
Curaçao has also committed to hiring a compliance monitor and submitting annual reports to the attorney general’s office. The settlement does not resolve allegations that Curacao engaged in illegal payment protection plans and insurance practices.
“Curaçao claimed to be part of the Latino community in Southern California,” Attorney General Xavier Becerra said in a statement. contracts. »
Ariela Nerubay, a representative from Curacao, said the company was “extremely pleased” to announce the settlement, which includes no admission of liability, and “that we can finally put this issue behind us so that we can continue to focus on service to the community which we have always supported.”
Azarkman, the chain’s chief executive, said in a 2017 statement that Curacao, which he founded with his brother in downtown Los Angeles in 1983, was “not a multi-billion dollar business with stores that “target” consumers.
He defended his company’s track record with low-income customers, saying his foundation provides poor families with household items, funds scholarships and hosts an annual community event for Latino children in neighborhoods with grocery stores. Curacao.
“I’m very proud that we’ve helped hundreds of thousands of customers establish and grow credit and gain access to products they otherwise couldn’t afford,” Azarkman said in the statement. .
State attorneys, however, filed in court a number of statements from Curacao customers who described being sold faulty products, saddled with unexpected charges and subjected to court judgments without notice.
Carmen Gochez said she traveled to Curacao on Olympic Boulevard in Los Angeles to buy a laptop for her grandson. She opted for a Gateway laptop, but a salesperson tried to persuade her to also buy accessories and software she didn’t want, Gochez said in a statement.
When Gochez picked up the laptop the next day, the bag was “full of items I said [the salesman] I didn’t want to buy,” she said.
Gochez looked at the contract she had signed and learned that she was responsible not only for the laptop, which cost $379.95; it had also agreed to pay for accessories, an external hard drive, a three-year warranty and various installation costs, the statement said. The total cost, including financing: $1,614.58.
Carlos Mencos said he fell behind on payments for electronics he bought in Curacao on Olympic Boulevard. A long-haul truck driver, Mencos was traveling to Texas when he received a call from a collection representative who said Curacao had obtained a judgment against him.
A deputy sheriff was on his way to his place of employment to serve him with wage garnishment documents, the rep said, according to Mencos’ statement.
Mencos said his boss gave him a $1,000 salary advance to cover the $1,138.75 judgment. When a Department of Consumer and Corporate Affairs investigator showed Mencos his court filing a year later, he said he was personally served in Los Angeles on Dec. 11, 2014.
That couldn’t be possible, Mencos said in the statement, because that day he was driving from Texas to West Virginia. He filed a work log in court showing that he left Texas on December 8 and arrived in West Virginia on December 16.
This story originally appeared in Los Angeles Times.