FTC Announces Hispanic Law Enforcement and Outreach Initiative Designed to Stop Deceptive Advertising and Other Scams Aimed at Hispanic Consumers
FTC News Release
April 27, 2004
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.
The Commission filed a complaint in the US 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 US Postal Inspection Service in Houston, Texas.
American Dream Enterprises
On April 16, 2004, the Commission filed a complaint in the US 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.
The FTC filed a complaint and stipulated final order on April 22, 2004, against Latin Hut, Inc., d/b/a Maya Sales Corporation, in the US 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 US District Court for the District of Colorado in Denver, on April 16, 2004.
On March 4, 2004, the FTC filed a complaint in the US 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 US 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 US 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.
- Federal Trade Commission, Plaintiff, vs. Alternative Medical Technologies and Jose Fernandez, Defendants . United States District Court for the Southern District of Florida. FTC File No. 032-3172.
- Federal Trade Commission, Plaintiff, vs. American Dream Enterprises and Andres Fernandez Salvador, Defendants . United States District Court for the Southern District of Florida. Civil Action No. 04-CV-20904. FTC File No. 032-3193.
- Federal Trade Commission, Plaintiff, vs. Heritage Health Products, Defendant . United States District Court for the District of Colorado. Civil Action No. 04-WM-0775. FTC File No. 022-3203.
- Federal Trade Commission, Plaintiff, vs. Latin Hut, (also d/b/a Maya Sales), Defendant . United States District Court for the Southern District of California. Civil Action No. 04-CV-0830. FTC File No. 032-3166.
This page was posted on October 10, 2005.