Saying that two Florida companies preyed on Illinois Latinos who have had a difficult time obtaining traditional credit cards or sending money to relatives in Mexico, Attorney General Lisa Madigan has filed lawsuits against two Florida-based corporations and their owners for deceptive advertising campaigns.
In recent months, the two companies have bought time on Illinois Latino television and radio stations to air advertisements trumpeting that the providers of Latin Card and Pro Line Card are “… here to help out our fellow Hispanics.” Additionally, among other claims, the advertisements say that to obtain a card, “You do not need to have a Social Security number or the need to have a good credit history. All that is in the past…”
However, what the upbeat advertisements don’t reveal is that consumers must pay advance fees of up to $399 for credit cards that only can be used to purchase products from the companies’ own catalogs. Despite the companies’ verbal claims that the cards are like traditional credit cards, they cannot be used to make retail purchases outside of the catalogs, be used at an ATM or be used to send money to Mexico.
“These two credit card companies have preyed upon Illinois’ Latino populations by taking advantage of people’s desire for credit and fraudulently turning it into profit for themselves,” Madigan said. “This is pure exploitation of people working to establish credit histories, turn their credit around or help relatives back home.”
Madigan’s lawsuits, filed late yesterday, January 12, charge the two companies with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Credit Services Organization Act. The first lawsuit identifies seven consumers from Chicago, Cicero and Waukegan that were allegedly defrauded by Latin Card. The second lawsuit names an additional seven victims from Blue Island, Chicago, Des Plaines, Hoffman Estates, Joliet, Peoria and Wheeling that reported fraudulent activity by Pro Line.
Madigan’s lawsuit, filed in Cook County Circuit Court, names as defendants Latin Card Plus, LLC, a Florida corporation not registered to do business in Illinois, and its manager Carlos Felipe Mendez, of Doral, Florida.
The second lawsuit, also filed in Cook County Circuit Court, names Pro Line Card, LLC, a separate Florida corporation also not registered to do business in Illinois, and its manager Julio Cesar Sandoval, of Miami, Florida.
The two Florida companies allegedly operated similar schemes in which they advertised credit cards with high limits for consumers who have poor or no credit history. According to Madigan’s lawsuits, Pro Line has been advertising credit cards in Cook County since at least April 2004 and Latin Card since at least August 2004.
Consumers called toll-free numbers provided in the advertisements to learn more about the credit card offers. Phone salespersons allegedly represented to the consumers that the credit cards could be used for retail purchases, at ATM machines and to send money to family and friends in Mexico. The companies charged consumers up to $399 for credit cards with limits ranging from $2,000 to $7,500. However, Madigan’s lawsuit alleges that only after the credit cards arrived did the consumers realize the cards could only be used to purchase products from the companies’ own catalogs and Web sites.
Additionally, Madigan’s lawsuits allege that when consumers attempted to contact the defendants for refunds, the consumers were either refused a refund, were instructed to return all materials for a refund, which never arrived, found telephone numbers to be disconnected or the telephone operators hung up on the consumers when they managed to get through to the companies.
In addition, the defendants failed to register as Credit Services Organizations with the Secretary of State’s office, failed to obtain the $100,000 surety bonds legally required if credit services companies are paid a fee in advance of full performance or services, and failed to provide consumers with written disclosure statements or contracts.
Madigan’s two lawsuits ask the court to prohibit the defendants from offering for sale and selling credit cards or credit card services in Illinois. In addition, the lawsuits ask the court to assess civil penalties of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Finally, Madigan’s lawsuits ask the court to order the defendants to pay restitution to the consumers as well as the costs of the investigations and litigation.
To obtain more information about fraudulent credit card schemes, or to file a complaint, consumers may visit Madigan’s Web site at [www.IllinoisAttorneyGeneral.gov/consumers] or call the Attorney General’s Consumer Fraud Hotline in Chicago at 1-800-386-5438 and 1-800-964-3013 (TTY). Madigan’s office also provides a Spanish telephone hotline at 1-866-310-8398. Assistant Attorney General Sarah Alipourian is handling the cases for Madigan’s Consumer Fraud Division.