Consumer Fraud

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The United States Attorney’s office, Federal Trade Commission, and United States Postal Inspection Service are putting together a public awareness campaign to fight consumer fraud in the Hispanic community. U.S. Attorney Paul Charlton and Inspector in Charge for the Los Angeles U.S. Postal Inspection Service, Oscar Villanueva, will talk about the consumer fraud problem, how to report it, and how to protect yourself from becoming the next victim. Federal Trade Commission

>>José Cárdenas:
Good evening, I'm José Cárdenas. Tonight on "Horizonte," federal, state and local law officials talk about how to stop consumer fraud. We'll tell you about the plan to fight the problem and what to do if you become a victim. And Arizona competing in a global economy... this was the subject at last week's town hall. Hear about their recommendations. That's all next on "Horizonte." According to a 2004 report from the University of Arizona, data indicates that Arizona exported 13.4 billion worth of goods globally and Mexico the state's largest trading partner imported about $3.8 billion. Last week more than 100 people participated in the 86th Arizona town hall held in Prescott. The theme was Arizona as a border state competing in the global economy. Joining us tonight is Roberto Sanchez. Roberto is vice-president of corporate development with title management agency. He participated in the town hall and is a former represent for the state of Sonora. Also here is Shirley Agnos, president of the Arizona town hall. Welcome to both of you to "Horizonte." Shirley, before we talk about this town hall, give us a little background on the Arizona town hall. You are one of the founders.

>> Shirley Agnos:
44 years ago a group of individuals in Arizona went to a national meeting called the American assembly that was started by Dwight Eisenhower before he became president, and they were so enamored with the process that was used at this meeting called the Arizona Assembly that they brought it back home, said the only way it could be made better was to start a local one, statewide, in Arizona.

>>José Cárdenas:
And how are the topics and the participants chosen? You've done it for 86 years. A variety of topics. How do you decide what you are going to do and who to invite.

>> Shirley Agnos:
Well, first of all, we have two town halls a year. So I haven't done it for 86 years, otherwise I would be 110.

>>José Cárdenas:
You look marvelous.

>> Shirley Agnos:
They started it back in 1961 very wisely setting it up with a huge Board of Directors, 50 at that time. It's since graduated to 62 board members throughout the whole State of Arizona representing every county and about 20 different occupational categories. Those people on the board of director who are elected to two-year terms and it changes every two years are asked to recommend people in their communities to be invited to a town hall, people who are active in their communities who are known for getting things done and caring about that community.

>>José Cárdenas: This is after you have already decided what the top sick going to be?

>> Shirley Agnos:
Right. Because the topic -- we had to go through the first few town halls before we came across a really good way of deciding topics because what we do now is poll the entire membership which is about 1500 people throughout the state who have been to past town halls. We poll them the first of every year saying what do you think are the three most important issues facing Arizona and from that we rank them, see what comes out number one and generally that is the topic, one of the two topics, number one and number two, for the following year, because then we ask one of the state's three universities to do a background report on those subjects, getting it ready as the homework for the people who are then invited to each of these town halls.

>>José Cárdenas:
All the participants get a stack of material before the event.

>> Shirley Agnos:
Right.

>>José Cárdenas:
We're going to talk about some of the tremendous successes the town hall has had but let me first ask Roberto, this was your first town hall, right?

>> Roberto Sanchez:
Yes it was.

>>José Cárdenas:
Tell us a little bit about your background.

>> Roberto Sanchez:
I was born and raise in Hermosillo, Sonora, I came to the United States 12 years ago, 13 years ago, here in particular in Arizona, and I've had an opportunity to work with different organizations.

>>José Cárdenas:
You came here working for the state of Sonora?

>> Roberto Sanchez:
I came here working for the state Sonora. At the time I was working for the Secretary of State, and within the last six years, I had the opportunity to work for the state of Sonora being their representative of the state of Sonora here, and it's an office for protocol, it's an office -- protocol for the governor and also for economic development and different issues.

>>José Cárdenas:
Which I assume is one of the reasons why you were invited to this town hall?

>> Roberto Sanchez:
Well, I think that that would be one of them, and also -- yes.

>>José Cárdenas:
Well, tell us about your thoughts on the importance of this topic and the timeliness of it.

>> Roberto Sanchez:
Well, I think that the timing is perfect, because we've been talking about different issues with immigration and things that have been happening. So the timing was just right, in my mind. Now, the importance of it, to see it, I believe, and what I experienced being in the town hall, it was that it is great so we can create that awareness, because a lot of people really don't understand that we are a border state, that we are doing trade with Mexico and those people that do understand that are the people that live right on the border, the people of Yuma, the people of Nogales and Douglas. But a lot of people in Flagstaff, a lot of the people in Phoenix, really don't understand that we are bordering with Mexico. So I think that the timing was perfect.

>>José Cárdenas:
Shirley, you had a lot of those people from the border region as participants in the town hall?

>> Shirley Agnos:
Yes, we did.

>>José Cárdenas:
Tell us a little bit, if you can, what the background material said about Arizona as a border state and what the issues or particular concerns might be.

>> Shirley Agnos:
Well, it outlined Arizona as a border state as having a fair amount of trade with Mexico, but not beginning to achieve the potential that it would have if we solved some of our day-to-day problems that we have along the border so that we were able to work with the people in Mexico on a more mutual basis to achieve a better -- a better degree of high economy between the -- between the two states, particularly Sonora and Arizona.

>>José Cárdenas:
Now, as I understand it from past town halls, you tend to have a fair number of people who are fairly knowledgeable about the topic, but also some other people who are influential and important to be educated and part of the function is education. Do you think that occurred here?

>> Shirley Agnos:
Yes, I do. A big portion of the town hall, some roughly 70% of the people at a town hall, are there to learn. They're there because they know how to do -- get things done in their own professions and have done well in their lives in their own professions, but they don't necessarily know that much about the topic under discussion. So one of our most major objectives in each town hall is to educate those types of people to a new topic that they don't know much about.

>>José Cárdenas:
Now, Roberto, you know a lot about trade because that was your business, and as somebody who has crossed the border and done a lot of work in both states you know this stuff. But was there anything that surprised you or that was news to you coming out of this town hall?

>> Roberto Sanchez:
Well, I was surprised of most of the things of a lot of people not really knowing the issues that were there and how think -- thinking that it could be very easy just to, let's go ahead and start this new enterprise and let's do it this way, and not understanding that that it takes time and it takes effort not just from the State of Arizona but also from the state of Sonora and the country and our federal government and understanding how the systems really work and everything. So what I got was also, for me, a lot of education in different areas of just seeing people --

>>José Cárdenas:
Are you saying people are naive about the ease with which trade can be enhanced or -- what kinds of issues are you talking about when you said they didn't understand?

>> Roberto Sanchez:
Well, thinking that we can just go ahead and say, let's put a guest worker program --

>>José Cárdenas:
That's when you got on the subject of immigration?

>> Roberto Sanchez:
That's when we got into the subject of immigration, and thinking by just putting a guest worker program was going to solve everything itself. I mean, I believe that we need to learn how to walk before we run, and it's a great solution to start, but we need to see it as a whole. We also need to talk to the Mexican attorneys, make sure that they really are enforcing their part, that it's not just the United States trying to do it, because there has to be a communication from both places.

>>José Cárdenas:
Now, what was the connection made at the town hall between the broad topic of competing in a global economy and immigration. Shirley, maybe you can illuminate us on that.

>> Shirley Agnos:
Well, the relationship there was that immigration is a specific problem, and it's very centered. We know what it is. But it's only part of what affects us as we try to move into the global economy, and we looked at the discussions at the town hall in order to determine what the problems with immigration are in order to solve them so that we can move into a bigger economy. The states of Texas and California, of course, dwarf us as far as the amount of export-import business they do with the country of Mexico compared to what we do.

>>José Cárdenas:
Yet, as I understand it, we are a more important trading partner to Mexico than France is. So, yes, compared to Texas and California maybe not so big. Roberto, last week really was a week for Arizona-Mexico relations. You had the town hall. You had the Arizona-Mexico commission plenary session. I want to talk about that in a second. And you became a citizen on Friday.

>> Roberto Sanchez:
Yes, I did.

>>José Cárdenas:
Congratulations. But at the commission meetings, I understand governor Bores followed a presentation Kolbe on guest worker and suggested we were being short sighted by focusing on that given this is a long-term he relationship, the United States is not going anywhere, Mexico is not going anywhere. Can you elaborate what he was talking about?

>> Roberto Sanchez:
I believe what the governor was trying to say by just seeing the workforce like the guest worker program right now would be putting a Band-Aid like you were saying into the real problem of the issue. Mexico is not going anywhere. The United States is not going nowhere. We're two countries and we're neighbors and we need it to look more into the problem itself. How can we solve this? We've had since the '40s -- we've had amnesties coming but yet after several years, 20, 10 years, depending on the situation, here we are confronted again with the same problems. So what I really believe that the governor was trying to say was, let's look at not just to solve the short-term, but let's look at the long term. How can we solve this problem and start moving so we can compete globally, especially with CanaMex, NAFTA.

>>José Cárdenas:
The trade corridor?

>> Roberto Sanchez:
The trade corridor.

>>José Cárdenas:
What is the town hall's response to what the governor was talking about?

>> Shirley Agnos:
I believe that was the purpose of our whole town hall, was to make more people in Arizona aware that there is you a much bigger picture, that, yes, we do need to work on those problems that are very volatile in the state and very emotional problems, but they're small --

>>José Cárdenas:
Talking about prop 200 and so forth?

>> Shirley Agnos:
Yes, but they're small and insignificant compared to what we could be and what we could become as trading partners if you look at the big, long-term picture.

>>José Cárdenas:
We've got about a minute-and-a-half left. What were the major recommendations that came out of this town hall?

>> Shirley Agnos:
Well, you go back to the small stuff, and you look at immigration and one -- one was very -- a very small thing but was very significant. They talked about couching language so that it isn't so volatile, and rather than talking about illegal immigrants, for instance, talking about unauthorized. Just to bring the volatility.

>>José Cárdenas:
Some people would say we're just being politically correct. What did people say about that?

>> Shirley Agnos:
Much more than politically correct. We're bringing the language down to where we don't alienate our neighbors.

>>José Cárdenas:
We're talking about have a more civilized discussion of the subject?

>> Shirley Agnos:
Right. Which makes for a more civilized and a more advanced entry into the whole economy of the two countries.

>>José Cárdenas:
Roberto I'm going to give you the last word. What was the most significant recommendation in your opinion that came out of this town hall?

>> Roberto Sanchez:
In my opinion, the collaboration between two countries, that that was something that we saw a lot, and trying to educate, trying to create an Arizona that is not just of one culture but multi-cultural Arizona, a multi-lingual state, a state that will be able to handle the global economy when it comes. We need to compete to be able to raise. The only way we can do it is by having education, but not starting education at the college level, but starting it since kindergarten and let's start from there. So that was something that was very significant that I got.

>>José Cárdenas:
Thank you very much for sharing that, Roberto Sanchez, Shirley Agnos, should mention woman of the year two years ago for your work in this area. Thank you both for joining us on "Horizonte". There is an ongoing concern among federal officials that the Hispanic community continues to be a target when it comes to consumer fraud. Workshops are being held to identify local problems and talk about ways to address them. Mike Sauceda tells us more about the issue.

>> Mike Sauceda :
In August 2004 the federal trade commission conducted a consumer fraud survey in the United States. The survey found Hispanics were roughly twice as likely to be victims of consumer fraud than non-Hispanic whites; about 14% of Hispanics interviewed had been victims of fraud. The survey also showed Latinos have the second highest likelihood of being a victim of fraud or slamming. There was also an investigation on whether language played a role when it came to filing a complaint. Results suggested Hispanics who spoke Spanish were only about 60% as likely to complain as other Hispanics. Also in the 2004 the federal trade commission announced its Hispanic law enforcement and outreach initiative. Since then the FTC has brought more than 20 cases against frauds targeting Hispanics, including financial fraud such as advance loan credit cards and credit repair, frauds targeting immigrants, bogus English language courses and green card lotteries. The FTC and U.S. Postal Inspection Service are hosting the series of workshops in Hispanic communities across the country to bring local law enforcement and Hispanic community leaders together in the fight against fraud.

>>José Cárdenas:
Here to tell us more about this ongoing campaign is United States attorney for Arizona Paul Charlton. Also here is Oscar Villanueva, inspector in charge for the Los Angeles U.S. postal service. Gentlemen, thank you for joining us on "Horizonte." Oscar, tell us in a thumbnail way because we don't want you going through the entire report from the FTC, but just an overview of the survey.

>> Oscar Villanueva:
Well, in 2004 the FTC commission add survey of 2500 adults, and the question was, what sort of experience do you have in the marketplace with fraud? And what they found is that the number one problem throughout is advanced loan schemes and then followed by several others, including credit card insurance and club memberships and those kinds of things.

>>José Cárdenas:
Now, why this effort? And what was the role of the postal service?

>> Oscar Villanueva:
The role of the postal service, the postal inspection service is the federal law enforcement arm of the postal service. We have over 200 years of history investigating fraud and other types of criminal activities that have to do with the postal service and we are one of the premier agencies investigating fraud in the U.S.

>>José Cárdenas:
And your area of responsibility includes Arizona?

>> Oscar Villanueva:
Includes Arizona, Southern California, Arizona and southern Nevada.

>>José Cárdenas:
Now, Paul, how sit that the U.S. Attorney's office is involved in this effort.

>> Paul Charlton:
One of the things we noticed from that survey, Jose, was that Hispanics are twice as likely to become victims of fraud as non-Hispanics.

>>José Cárdenas:
Any theories as to why that is?

>> Paul Charlton:

There are a number of different theories but in the survey you'll see that younger people are more likely to be victims of this kind of fraud than the elderly are. We know there there's a large and young Hispanic community here. Individuals who are starting out in life and who do not have as much financial security are more likely to be victims of this kind of fraud. So that may explain some of the reasons, I think, Oscar may have some other thoughts on that as well. But we notice by listening to Spanish-speaking television, by listening to Spanish speaking radio or reading any of the written media that there were advertisements in that media that concerned us a great deal, advertisements for weight loss, advertisements for working at home, advertisements that promised an opportunity to get rich quick, advertisements that you wouldn't see in the English-speaking media.

>>José Cárdenas:
Maybe not in prime time but they're there and there's a lot of discussion of those on weight loss programs and so forth. But yet the numbers are higher among Hispanics in terms victims. Any further thoughts on why that would be?

>> Paul Charlton:
Well, it could be, and Oscar and I have talked about this before, the Hispanic community is less likely to report having become a victim of crime. I'm not certain exactly why that is, and it could be that other individuals who were involved in committing these kinds of frauds are targeting the Hispanic community.

>>José Cárdenas:
Has that been your experience Oscar?

>> Oscar Villanueva:
My experience is there is a fair amount of fear and maybe lack of information as to where to report some of this criminal activity. The bottom line is if a Hispanic is taken as a victim, a victim is a victim, regardless of where they come from or what their status is in the U.S. What we're trying to do with this outreach program that we're talking about here today is to give them an outlet and information as to where they can go to get information and report this these crimes.

>>José Cárdenas:
Intuitively you might think that the reasons for the differences might be you have a population that speaks a foreign language and maybe that's why they are being targeted. But as I understand the report, with one possible exception, telephone sales slamming, switching, switching companies, there really didn't seem to be that much of a difference between English dominant and Spanish dominant Hispanics.

>> Oscar Villanueva:
Part of the report talks about some of the ethnic groups that tend to be more susceptible to this kind of thing and certainly mentions Hispanics and Indian, Native Americans, that fall prey to this kind of thing.

>>José Cárdenas:
Who are the number one victims, the Native Americans.

>> Oscar Villanueva:
Exactly. The number one. I think it all goes back to the same thing. They may not have enough information where to report it, who to call, and they may talk the loss and forget it.

>>José Cárdenas:
Paul, what is your office doing about all of this?

>> Paul Charlton:
We went to the FTC and asked them to provide with us a forum, along with the postal inspection service. So on July 26th we're going to bring together law enforcement from throughout the state, going to bring together Hispanic organizations here in the community, and we're going to share information. Law enforcement will talk about the kinds of frauds we see being committed here in the Arizona, share information on how it is to prevent becoming a victim of that kind of fraud and then we hope to receive information from the Hispanic community about the kinds of fraud specifically they feel they're becoming victims of as well as how it is we can do a better job to prevent that kind of fraud from occurring.

>>José Cárdenas:
Oscar, as I understand it, this will be a one of a series forums across country. There have been a number already. How have those gone?

>> Oscar Villanueva:
They've gone very well. The postal inspection service along with the U.S. Attorney's office in the different states and also the FTC had put on forums in Miami, Dallas/Ft. Worth, Texas, and now this is the third forum we've put together that had good attendance and we've come one some good ideas how to attack this problem.

>>José Cárdenas:
Paul, do you expect to find there are some unique scams or problems for Arizona for this part of the state in fact?

>> Paul Charlton:
We do. We know, for example, what the common schemes are throughout the United States but we can expect, for example, to hear from the Hispanic community here that perhaps Notarios Publicos are a problem here and they might not be a problem in other areas of the country.

>>José Cárdenas:
And what we are talking about there is the fact that in Mexico and many Latin American countries, Notarios Publicos are attorneys who have a specific role to play in regularizing documents and so forth, and here a notary public doesn't have that office and yet some people advertise themselves to the Spanish speaking public as Notarios Publicos and charge outrageous fees to, in effect, act as lawyers?

>> Paul Charlton:
Precisely. And that's the kind of fraud you might see being committed in this community that wouldn't be committed in other parts of the country. We want to focus on those kinds of crimes. That's the kind of crime that we need to learn about in law enforcement.

>>José Cárdenas:
You talked about looking at Spanish language media and seeing some things you wouldn't see at least during prime time on the English language stations. Can you give us an example of some of the more egregious things you talked about, the weight loss --

>> Paul Charlton:
One of my favorite scams, Jose, is one that involves a credit card insurance. We all know if that someone misuses our credit card, we're only liable at the maximum under federal law for $50 but there are individuals, unscrupulous people, who will seek out victims and promise them insurance if their credit card is misused. It's worthless insurance. You don't need that kind of insurance. You might see advertisements that promise you a get rich scheme by working at home. You need to work at home, make investments. There are ways to protect yourself against those types of fraud schemes as well.

>>José Cárdenas:
What would those be?

>> Paul Charlton:
There are three general rules that people could follow to avoid becoming a victim. Number one is make sure you get the telephone number, name and address of any business before you give them your money. With that information you can check with the better business bureau, check with our local Attorney General or look on the internet to verify that this is in fact a bona fide business. Before you give out any personal information over the telephone like your credit card number, make sure this is a business you can trust in, this is a business you can rely upon. Third, there's no good investment that has to be acted upon immediately. Many of these businesses will tell you need to act upon this right away, and that's when people make mistakes in their investments.

>>José Cárdenas:
Oscar, the U.S. Attorney has just given three very good recommendations as to how to avoid becoming a victim of fraud. What is the government doing to communicate that to the public at large, to the Hispanic community?

>> Oscar Villanueva:
Well, this is really a significant effort, this Hispanic fraud forum. This is our way of getting out to the community and presenting this information. I think in the past there has been some reluctance for the Hispanic community to come out and talk to law enforcement and to talk to those that can provide some assistance and we believe this is really a key way to get this done.

>>José Cárdenas:
What can we expect to come out of this forum by way of outreach to the community? Because the people are being invited, as I understand, are law enforcement and some community organizations, but it's not really for the public in general to attend, am I right?

>> Oscar Villanueva:
Correct. Correct. It's law enforcement and community-based organizations that deal with Hispanics, and what we're looking from this effort is really to come up with ideas and ways we can work together with the local, state and federal levels to come up with ways that we can improve how this is reported, how we investigate it, and to be more effective in protecting the consumers out there.

>>José Cárdenas:
From the forums that have already taken place, have there been any specifics that have -- specific recommendations that have been implemented?

>> Oscar Villanueva:
We haven't received the after action report from those that have happened. The FTC is still working on those. But I am sure there is going to be some actionable stuff in there.

>>José Cárdenas:
Paul, what do you expect to come out of this forum?

>> Paul Charlton:
One of the things we hope to see is concrete examples of fraud that's taking place here that we can act on as a state and as a federal law enforcement agency as well. The other thing we want to do is start to generate public service announcements. The FTC has initiated one in the Spanish language. We want to initiate one that advised all people about the possibility of becoming a victim of fraud, and by focusing here now on individuals who are most often victims we think we can cast a broader net, so to speak, and prevent that kind of fraud from taking place by letting the public know how it is they can avoid becoming victim.

>>José Cárdenas:
What kinds of monies are we talking about in terms of being invested to communicate these warnings.

>> Paul Charlton:
These are mostly public service announcements. So we are going to rely upon our media partners, the people who are involved in broadcasting these messages, to broadcast messages that tell people how not to be victims. We think that with the leverage of the FTC behind us we're going to get that kind of message put across.

>>José Cárdenas:
Is there any hypocrisy or at least conflict between the media running these advertisements, what good does it do if they then have public service announcements?

>> Paul Charlton:
I think if they know that we and the FTC and the postal inspection service are not only asking them to run these public service announcements but that we're listening to them, we're watching them, and we're very much aware of them even though they're in a language that's not English we're going to see a change in that kind of behavior.

>>José Cárdenas:
Final words or thoughts about what you hope to see from the conference or what people can do to protect themselves?

>> Oscar Villanueva:
I hope to see great attendance. If I may, I have some numbers I can give out in terms of where people can call if they have any issues. The FTC, 1-877-382-4357. That's a toll-free number. Postal Inspection Service locally, 602-223-3660.

>>José Cárdenas:
Thank you very much for that information. Gentlemen, good luck on your conference. We have a link to the federal trade commission on our web site, www.azpbs.org. Just click on "Horizonte" on the screen. That's our show for tonight. Thank you for watching "Horizonte." I'm José Cárdenas. Have a good evening.

Shirley Agnos: President, Arizona Town Hall;

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