March 10, 2021 – SACRAMENTO – California Attorney General Xavier Becerra on Tuesday announced a partial settlement of $ 10.5 million against Curacao, resolving multiple allegations that the retail chain has deceived and illegally taken advantage of its largely Latin American customer base. Curacao owns and operates nine department stores in Southern California and actively markets to low-income immigrant Latino consumers. The settlement includes $ 10 million in debt relief for consumers who have been harmed by Curacao’s driving. The settlement also includes additional debt relief for customers still paying in Curacao for illegal small claims judgments, as well as $ 500,000 in civil penalties. Importantly, the settlement includes injunctive terms requiring Curacao to comply with California law and treat its customers fairly and ethically.
“Curacao claimed to be part of the Latino community in Southern California. He then defrauded low-income people, Spanish speakers, and immigrants with little or no experience in securing long-term finance contracts ”. said Attorney General Becerra. “This business stole their own loyal customers who just walked into their department store looking for a good deal. Curacao will now have to pay for its bad practices and obey a court order that will require the company to treat its customers fairly. ”
“Immigrants to Los Angeles County, especially those whose primary language is something other than English, face significant challenges every day. The least they can expect is to be treated fairly and legally by the companies that serve and market them in the language of their choice. “ said Rafael Carbajal, director of the Los Angeles County Department of Consumer Affairs and Business. “We are pleased that the Attorney General has secured relief for consumers who need it most and that we have been able to play our part in helping to maintain market fairness for both consumers and businesses that properly follow the law. law.
Today’s settlement against Adir International, the parent company of Curacao, and its owner, Ron Azarkman, resolves allegations that Curacao has systematically violated California consumer protection laws by luring consumers to its stores with deceptively low interest rates and out-of-stock “sale” items. , refused to sell items at advertised prices and packaged customer contracts with accessories, warranties and installation services without the customer’s knowledge or consent. The settlement also resolves allegations that Curacao sold illegal collateral and seized clients’ wages after securing fraudulent default judgments against them in Small Claims Court.
The Attorney General sued retailer Curaçao in October 2017 following a survey conducted in partnership with the Los Angeles County Department of Consumer Affairs and Business. The lawsuit alleged that Curacao lured customers by advertising low prices and easy credit, and then informed those consumers that they could only buy at the advertised price after purchasing ancillary accessories, warranties or installation services. In other cases, Curaçao has added elements to payment contracts without the knowledge of its client.
Curacao reportedly failed to inform clients of important contract terms before asking clients to sign and in some cases gave them contracts in English even though they spoke only Spanish. When customers tried to return items to the store, they were often told that Curaçao’s return policy – which had not previously been disclosed to them – prevented Curaçao from accepting the return, or resulted in Curaçao charging a return fee. Undisclosed “restocking”. The lawsuit also alleged that Curacao harassed clients, as well as their family members and employers, with repeated calls and letters from debt collection.
The settlement also requires Curacao to provide additional relief to consumers affected by illegally obtained small claims judgments. When consumers fell behind on payments and their accounts became delinquent, Curacao sued them in small claims courts but often failed to serve their former customers with lawsuits as required by law. Small claims courts then handed down default judgments against consumers, who were often unaware they had been sued.
The settlement is a stipulated judgment that resolves part of the state’s lawsuit against Curacao. Unresolved claims related to illegal payment protection plans and Curaçao’s insurance practices will be adjudicated in Los Angeles Superior Court.
Curacao has also agreed to injunction conditions which include, but are not limited to, the following:
- Stores will prominently display a Consumers Bill of Rights;
- Curacao must sell the items as advertised and must provide additional information in its advertisement;
- Senior management will review Curaçao’s advertising to ensure it complies with the court ruling;
- Curacao must fully disclose all important contract terms before asking clients to sign contracts;
- Curacao must provide clients with a contract in their language before asking them to sign;
- Collection efforts will be limited to one telephone call per day with delinquent consumers;
- Curacao will stop debt collection activities and erase the credit records of consumers who have been the subject of default judgments in illegal small claims actions;
- A business ethics expert will help Curacao create and maintain an effective sales incentive, compliance and ethics program that encourages lawful behavior and includes annual ethics culture surveys and reviews; and
- Curacao will regularly report its compliance to the Attorney General for several years and provide access to its files for review.
Today’s settlement is documented in a stipulated partial judgment available here.
Consumers do not need to file a complaint. Under the terms of the partial judgment, Curacao must contact consumers eligible for the refund directly within the next 60 days.
Source: CA. DOJ