A U.S. district court has temporarily shut down a telemarketing operation that allegedly targeted Hispanic consumers with false promises that they could make money by reselling high-end goods such as Gucci and Ralph Lauren, and then charged them between $400 and $490 upfront for off-brand products. 

The Federal Trade Commission also alleged that the telemarketers threatened consumers who refused to pay with arrest, lawsuits and other intimidating statements.

The FTC charged the defendants with violating the FTC Act and the agency’s Telemarketing Sales Rule, and is seeking to permanently end misleading and intimidating practices by the organization, known by various names, including Oro Marketing.

The FTC's complaint alleges that if the consumer failed to accept and pay for the merchandise, the defendants often threatened them with fines, phony lawsuits, wage garnishment and damage to their credit history. In other cases, Oro allegedly threatened that consumers would be arrested or reported to immigration authorities.

Oro’s sales pitch began with unsolicited calls to Spanish-speaking consumers, in which telemarketers offered packages of brand-name merchandise, including clothing, purses and perfumes, at wholesale prices. They allegedly claimed that consumers could resell the products they bought from the defendants, making a profit in their local communities, according to the FTC's complaint.

The defendants named in the case are: Cream Group, also doing business as Terra Nova, TNT Inc. and CRM Inc.; Sami Charchian, also doing business as Oro Marketing Inc., Modo, Modo Industry, Oro Max, Casa de Oro, Casa de Moda, Oro Mundo and Nation/Modo; John Charchian; and Norma Rae Ramos, individually and as officer and director of Cream Group Inc.

Oro Marketing’s telemarketers told the consumers to pay the UPS or FedEx agent delivering the merchandise with a money order for the package, according to the complaint. When Oro sent the merchandise, they specifically instructed the delivery drivers not to allow the consumer to open the package until they had the money order in hand.

When consumers received the package and paid with the money order, however, they found that the products were of low quality and generic or unbranded. If the consumers complained to the company, the FTC charges, they were told the company would send another shipment with the correct items, along with a refund check for the first shipment, if the consumer would again pay between $400 and $490 upon delivery.  

Consumers who paid for the new products found them to be as shoddy as those in the original package, and not the brand names promised, which included Armani, Coach, Bulgari, Ralph Lauren and Tommy Hilfiger.

In filing its complaint, the FTC is seeking to permanently stop the defendants’ allegedly deceptive conduct to prevent future violations of the FTC Act and the TSR, and to provide refunds to consumers harmed by Oro Marketing’s practices.

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