By Sandra Hernandez | Sun Sentinel
Elián Degen considered himself a prudent man, indulging in few luxuries since arriving in Florida two years ago.
But when Degen saw a Spanish-language TV ad promising a Pro-Line credit card to viewers without previous credit histories or Social Security card numbers, the 52-year-old Venezuelan paid close attention.
He dialed the telephone number on the screen and applied. But within minutes of hanging up the phone Degen felt uneasy. He called back to cancel and his problems began: telephone callers threatened him with prosecution unless he sent them the $299 processing fee.
Like thousands of Hispanics across the United States, Degen found himself caught in a scheme. Until recently, many of these frauds went unreported and undetected by the Federal Trade Commission despite boldly placed ads on Spanish-language TV networks and radio stations.
But the Federal Trade Commission is cracking down on the growing number of schemes targeting Latinos, which range from advance fee cards to ineffective weight-loss programs. Last year, the FTC filed cases against 19 companies, with at least five filed in Florida and California, including the Miami-based Pro-line company that nearly duped Degen, according to officials.
“This is really a recognition that we had to do something because Hispanics make up a sizeable share of consumers and they are being targeted,” said Laura Koss, coordinator for the FTC’s Hispanic initiative. “This is a recognition that Hispanics’ buying power is growing.”
In addition to filing federal court complaints, the agency recently began running Spanish-language public service announcements as well as working with community groups to warn consumers against such schemes. The agency has also started monitoring Spanish broadcasts and filing complaints with a national database used by law enforcement, said Koss.
Such schemes are not new and also exist in English, but officials insist those targeting Hispanics in Spanish often show more hubris.
“Most of the English language scams may advertise late at night on some small local cable station, but the calls we got indicated these Pro-Line ads and others are being run on major stations and networks,” said Brodie White, of the Better Business Bureau’s Palm West Beach County office. “I started to see an increase [in complaints] and realized these were old-school scams that were being directed at a new market.”
The South Florida Sun-Sentinel was unable to reach the Spanish-language networks Telemundo or Univision for a comment.
White’s office, which oversees complaints from Vero Beach to Puerto Rico, logged 168 complaints and more than 1,000 inquiries against Pro-line Card and its affiliates, La Familia Group and Call Center Express. Officials said the affiliates ran the same advance-fee credit-card scheme. Degen eventually reported the company to the Better Business Bureau and the calls stopped.
In the case filed in September against Pro-Line and six individuals in federal court in Miami, the FTC alleged the company engaged in deceptive trade practices. The court action led to an injunction, and the company has ceased operations, said Jessica Gray, an Atlanta-based attorney with the FTC in charge of the case.
Consumers were promised “unsecured major credit cards with credit limits ranging from $2,000 to $7,500” if they called a toll-free number.
Callers were then told they were approved and instructed to send money orders ranging from $149 to $299. A few days later, some people received a plastic card that resembled a credit card but allowed them only to make purchases out of a catalogue, according to court papers. In addition, consumers were unable to get refunds.
An FTC survey released in 2004 found Hispanics were nearly twice as likely as non-Hispanic whites to be victims of fraud. While 6 percent of the whites had been defrauded, 12 percent of the Hispanics had been bilked.
While the study offered no explanation, some experts suggest immigration status and language may spur con artists to focus on Latinos.
“It may simply be [immigrants] don’t know where to report such crime or don’t want to report it because they are here illegally,” Gray said For consumers such as Degen, however, the explanation is simple: necessity.
Degen needed a card for his piano-tuning business. A legal immigrant, he is stuck in red tape. Without a change in his visa, he cannot apply for a Social Security card, which he needs to establish credit. The promise of a card that would allow him to buy repair parts from companies in other states sounded too good to pass up, he said.
“I immediately thought this will make it easier to buy parts so I can repair pianos instead of waiting to gather enough money to send a money order,” said Degen, sitting in his Weston apartment furnished only with a bed, a computer and a used sofa.