CURACAO

Agency: California Attorney General (CA AG)
Description:

On October 19, 2017, California Attorney General Xavier Becerra filed a Complaint for Permanent Injunction, Civil Penalties, Restitution, and Other Equitable Relief against Adir International, LLC doing business as Curacao alleging they defrauded consumers.  Attorney General Becerra alleges that Curacao engages in numerous and pervasive unlawful, unfair, and fraudulent business practices. 

The complaint alleges Curacao took advantage of consumers through bait-and-switch advertising, adding items and services to consumers’ contracts without their knowledge or consent, selling warranties illegally, and harassing or threatening consumers who fall behind on their payments. In addition, the complaint claims Curacao failed to provide notice that translated contracts are available to consumers who negotiate in Spanish, failed to tell consumers about return policies until after purchase, did not honor return policies and warranties, and failed to properly serve consumer defendants in small claims cases.

A copy of the Curacao complaint is available here.

On March 9, 2021 the California Attorney General and Curacao entered a $10.5 million partial settlement judgment and permanent injunction to resolve the state’s lawsuit against Curacao. In 2017 the state sued Curacao for unlawfully preying on consumers and violating California consumer protection laws by lured consumers into its stores with deceptively-low interest rates and out-of-stock “sale” items, refused to sell items at advertised prices, and packed customer contracts with accessories, warranties, and installation services without the customer’s knowledge or consent. The settlement also resolves allegations that Curacao sold unlawful warranties and garnished customer’s wages after winning fraudulent default judgments against them in small claims court. 

The settlement includes $10 million in debt relief for consumers who were harmed by Curacao's conduct. The settlement also includes additional debt forgiveness for customers who are still paying Curacao for unlawful small claims judgments, plus $500,000 in civil penalties. Importantly, the settlement includes injunctive terms requiring Curacao to comply with California law and treat its customers fairly and ethically.

Curacao has also agreed to injunctive terms which include but are not limited to the following: 

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  Stores will prominently display a consumers’ bill of rights; 


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  Curacao must sell items as they are advertised, and must provide additional disclosures in its advertising;


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  Senior management will review Curacao’s advertising for compliance with the court judgment;


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  Curacao must fully disclose all material contract terms before asking customers to sign contracts;


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  Curacao must provide customers with a contract in their language before asking them to sign;


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  Debt collection efforts will be limited to one phone communication per day with delinquent consumers;


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  Curacao will stop debt collection activities against, and clear the credit records for, consumers who had default judgments entered against them in unlawful small claims actions;


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  A corporate ethics expert will help Curacao create and maintain an effective sales incentive, compliance, and ethics program that incentivizes lawful behavior, and that includes annual ethical culture surveys and assessments; and 


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  Curacao will regularly report its compliance to the Attorney General for several years and provide access to its records for review.

The full action can be found here.