Los Angeles-based retail chain Curacao, which operates stores in Arizona, California, and Nevada, will pay $10.5 million as a partial settlement of allegations that it defrauded its mostly Spanish-speaking Latino customers in California. The lawsuit filed by the California attorney general’s office alleged that the retailer, which runs nine stores in the Golden State, repeatedly marketed discount prices and affordable financing options and then refused to honor them unless shoppers agreed to add-on purchases of accessories, warranties, and installation packages. In some instances, the lawsuit alleged, these extra items were added without customers’ knowledge.
“Curacao claimed to be part of Southern California’s Latino community. It then proceeded to defraud low-income individuals, Spanish speakers, and immigrants with little or no experience entering into long-term financing contracts,” said California Attorney General Xavier Becerra. “This company fleeced its own loyal customers who simply walked into its department store looking for a decent deal.”
The settlement against Curacao parent company Adir International and its owner Ron Azarkman also includes $10 million in debt relief and debt forgiveness for any victims of the retailer’s predatory credit practices, which went so far as to take customers to small claims court and garnish wages on unpaid bills. According to allegations, Curacao didn’t disclose important terms in financing contracts and sometimes only provided contracts in English to primarily Spanish-speaking customers.
As part of the settlement, Curacao has agreed to numerous terms, including posting a consumers’ bill or rights in its stores, selling items as advertised, disclosing contract terms before signings, and providing contracts in customers’ own languages. Curacao will also clear the credit records and stop debt collection efforts for recipients of unlawful default judgements, among other agreed-upon terms.
The settlement addresses only part of California’s lawsuit, which will separately try claims around Curacao’s payment protection plans and insurance policies at Los Angeles Supreme Court.
Tom is the Editor in Chief of Dealerscope.