An announcement from the FTC explains how the whole mess worked. According to the complaint, the company made unsolicited telemarketing calls to Spanish-speaking customers. The calls offered wholesale prices on bundles of designer goods that the individuals could then resell at a profit in their communities.
Dodgy, but it gets dodgier: customers who chose to buy in, for between $400 and $490, were instructed to pay by giving money orders to the UPS or FedEx drivers delivering their packages. Drivers were told not to hand over the packages until after they received the money orders. You can guess where this is going: when recipients opened their boxes of so-called “designer goods,” they did not contain the promised Coach or Armani swag, but instead held piles of shoddily-made “generic or unbranded” crap.
The company then enjoyed the double-dip: when customers called to complain, it apologized for the “mistake” and offered to send a refund check–if, first, the customer would pay another $400 for a replacement shipment. Which, yes, was once again full of poorly-made junk.
It seems that the company targeted a Spanish-speaking population partially in hope of using fear of the law to keep their misbehavior from being reported. The FTC explains 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, it allegedly threatened that consumers would be arrested or reported to immigration authorities.”
Clearly, however, enough dissatisfied customers complained to get the FTC’s attention. The company is now barred from operations under a temporary restraining order effective through January 10.
In a statement, Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said that, “Oro Marketing used deception and threats to take advantage of people who were trying to make ends meet,” and added, “We intend to permanently stop this conduct.”