Antitrust Lawyer Blog Commentary on Current Developments

FTC Stops Alleged Extortion Scheme Aimed At Hispanics Nationwide

On June 21, a federal court stopped an operation that allegedly victimized Spanish-speaking consumers nationwide by posing as debt collectors seeking payments consumers did not owe.
From 2003 to 2005 the defendants had been allegedly selling an English-language instruction course, “Inglés con Ritmo,” advertised on Spanish-language television and the defendants’ Web sites, www.tonorecords.com and www.tonomusic.com, stating that it was free due to government or non-profit subsidies. Inquiring consumers were told that a shipping and handling fee of $100 to $169 applied. Since 2006, the complaint states, the defendants, posing as third-party debt collectors, told consumers they owed money, typically $900, and repeatedly called them, even though the evidence shows that they owe no money.

The FTC has charged the defendants for falsely claiming that a debt is owed; by falsely claiming to be, or to represent, an attorney; and by falsely threatening legal action, arrest, imprisonment, property seizure, or garnishment of wages. Other violations alleged are attempting to collect an amount of debt not authorized by contract or permitted by law; harassing consumers; and failing to inform consumers, within five days of their initial communication with them, of their right to dispute and obtain verification of their debt and the name of the original creditor.

The defendants are Tono Records, dba Tono Music and Professional Legal Services, Tono Publishing, Promo Music, Millennium Three Corp., Dulce Ugalde, Luis Roberto Ruiz, and Maria Oceguera, all based in Los Angeles County, California.
On June 14, a U.S. district court judge ordered an ex parte temporary restraining order freezing the defendants’ assets. The FTC seeks to permanently bar them from further violations and make them forfeit their ill-gotten gains. By a 5-0 vote, the Commission approved the filing of the complaint in the U.S. District Court for the District of California, Central District of California.

 

Camelia Mazard
(202) 589-1834
cmazard@dbmlawgroup.com