Members of the Latino community increasingly are becoming targets of consumer fraud from sales of overpriced computers and credit-card schemes to predatory lending for cars and homes, community leaders say.
Regional officials representing counties, cities, AARP and the Federal Trade Commission met yesterday in Chevy Chase to discuss ways they can help Latinos avoid such schemes and to identify new avenues that fraudulent businesses are using.
As the purchasing power of Latinos grows in the United States, criminals have become more sophisticated in their efforts to target immigrants. Many schemes involving Spanish-speaking salespeople who are hawking credit cards, mortgages and other financial products have emerged as a growing concern among community leaders.
Some immigrants are not aware of their consumer protection rights or who to contact for help, said Myriam A. Torrico, Hispanic/Latino Initiative administrator for the Montgomery County Department of Housing and Community Affairs.
"Many Latinos, once they fall into a problem, feel they are unique and they put the fault on themselves," Torrico said. "They feel embarrassed and don't want to report what happened."
About 70 people from Maryland and Virginia yesterday identified the most common schemes affecting Hispanics based on their discussions with immigrants. They included deceptive credit-card offers, credit counseling services, check cashing and identity theft.
A study conducted by the FTC last year found that Hispanics are twice as likely to be victims of consumer fraud as are whites.
"The problem comes from a lack of English dominance, lack of financial education and a lack of experience," said Alvaro R. Puig, Hispanic outreach liaison with the FTC.
The FTC, which began its Hispanic Law Enforcement and Outreach Initiative last year, has sponsored similar events in other cities including Chicago, Dallas, Los Angeles and Miami. Yesterday's meeting was the second annual effort in this region. The FTC has brought more than 20 cases against vendors during the past year who targeted Latinos with various products and services, including English-language courses and weight-loss supplements.
Deceptive credit-card schemes are widespread, Torrico said, because many Latinos want to build credit but don't have bank accounts or aren't financially sophisticated. In some cases, vendors tell consumers they will secure them a line of credit for an upfront fee of a few hundred dollars. The "credit cards" turn out to be accounts for a specific catalog or a gift certificate for certain retailers, Puig said.
Nelson A. Ortega, operations director of El Centro de la Communidad Inc. in Baltimore, said he often is approached by clients who have been duped into buying expensive cookware sets, computers or have been cheated by landlords or car dealers.
"We are at a point where we need to be on alert to be able to help people," Ortega said.
A study by the National Council of La Raza, a Latino advocacy agency, showed that Hispanics are rejected for prime mortgages at a larger rate than whites, leaving thousands of homeowners with higher-interest loans. In many instances, predatory lenders target Hispanic communities and offer only more expensive loans.
The problem is a lack of access to prime lenders, said Janis Bowdler, housing policy analyst with La Raza. Another factor is that 40 percent of Latinos do not have credit scores or have incomplete credit information, which prime lenders use to screen loan applicants.
Fraudulent businesses see other opportunities to exploit the Hispanic market. Vendors try to gain the trust of Latino consumers by speaking to them in Spanish and appealing to their cultural values.
Jose Arevalo, a Silver Spring resident originally from El Salvador, filed a complaint with the Montgomery County Division of Consumer Affairs after he spent close to $3,000 on a computer about three years ago.
He said he bought the computer from a door-to-door salesman who spoke Spanish, appeared to be Latino and said he was sent by the county school district. The salesman said the computer would help Arevalo's children do better in school.
"I wanted to do the best for my children," he said in Spanish.
Arevalo, a construction worker who had no knowledge of computers before the purchase, later determined that he bought an older, slower-working model worth far less than what he paid. He also learned the salesman was not sent by a school district.
"Once [Latino consumers] trust the individual providing services or products, they don't even read the contract," Torrico said. "They trust verbal communication more than written communication."
Top consumer frauds affecting Latinos, according to community leaders who attended a session in Chevy Chase yesterday:
Deceptive credit-card offers
Mortgage loans/home purchases
Prepaid phone cards
Cell phone purchases
Signing a contract
Free vacation offers
Where to go for help:
Federal Trade Commission site in Spanish: http://www.ftc.gov/espanol
AARP site in Spanish: http://www.aarp.org/espanol/dinero/
Maryland Attorney General consumer site: http://www.oag.state.md.us/Consumer/