Suit Links Satellite-Dish Seller, Lender to Fraud

The Legal Aid Society filed a class-action lawsuit Friday accusing a local satellite-dish vendor and a national finance company of conspiring to defraud Spanish-speaking customers who purchased expensive television receiver systems that did not work properly.

The suit, filed in North County Superior Court, alleges that California Satellite Systems and Beneficial California “willfully conspired . . . to target Spanish-speaking people in San Diego County” through the door-to-door sale and financing of defective dishes.

The complaint charges that the devices, which cost $1,500 to $5,000, were billed as capable of providing free, “excellent” reception of dozens of channels, including those carrying Spanish-language programming.

Instead, the lawsuit says, the systems began to malfunction soon after installation. Repairs by the company failed to correct the problems, so consumers were left with useless equipment and hefty monthly payments on their loans.

Attorneys also allege that the sales contracts and loan agreements signed by their clients were in English--even though the vendors and loan officers conducted business in Spanish. State laws governing home solicitation require documents be written in the same language used in oral presentations.

The contracts and loan agreements failed to notify the consumers of their right to cancel within three days and were legally deficient in other ways, the lawsuit claims.

“It looks to us like these companies targeted these Spanish-speaking customers with a scheme designed to take advantage of them because of the language difficulty,” said Beth Shoesmith, one of two Legal Aid attorneys handling the case.

California Satellite Systems most recently listed offices on 3rd Avenue in Chula Vista and on South Hill Street in Oceanside. Telephones at both offices were disconnected Friday.

Bill Trees, district manager of Beneficial California, declined to comment on the allegations until he is served with the lawsuit. The company, whose corporate headquarters is in New Jersey, has six branches in San Diego County.

“We did provide financing for people who purchased from (California Satellite Systems),” Trees said. “I can’t comment intelligently on this until I see the legal papers.”

The lawsuit seeks a court order rescinding all contracts and loan agreements signed by the plaintiffs as well as restitution of all payments made. It also asks for punitive damages totaling $500,000 and an order barring the companies from making further sales.

Besides the civil complaint, Oceanside police said Friday that they have asked the district attorney’s office to file felony charges against the top officials of California Satellite Systems. Detective Oscar Mayo said that, based on complaints he has received from 12 victims, he is seeking arrest warrants for the officials for grand theft of personal property.

Mayo said the company not only sold the satellite television equipment at inflated prices but also later took the receiver boxes back--and never returned them.

“The company promised to bring back the equipment in a few days or a week after they were repaired, but they were never brought back,” Mayo said. He added that the firm told some consumers the equipment was defective and was being recalled by the manufacturer.

“I called the manufacturer of the equipment and they said they’ve never had any recalls,” Mayo said.

The Legal Aid suit was filed on behalf of Beatriz Cruz and all other unspecified victims of the alleged conspiracy. About 30 customers--most of them North County residents--have contacted the society with complaints, but Legal Aid lawyers suspect the number of victims could be far greater.

“We won’t know for sure until we get ahold of their records and see who has bought these systems,” Shoesmith said. She added that the society hopes publication of the lawsuit in the Spanish language press may encourage other customers to come forward.

Mayo said he believes many of the consumers have not complained because they are Mexican nationals and are uneasy about the legal system and about testifying in court.

Olga Felan-Dils, another Legal Aid attorney, said the plaintiffs made down payments of $20 to $3,000 on the receiver systems, which used dishes 10 feet in diameter. She said most were promised credit toward their account if they referred another customer to the satellite dish company, but that such credit was apparently never given.

Indeed, workers summoned to repair the systems frequently charged the customers $25--even though salesmen allegedly told consumers the devices were covered by a five-year warranty.

“Here they were angry about having a system that didn’t work, and the company was trying to charge them to repair it,” Felan-Dils said.

Gloria Sanchez of San Diego was one of the first dish owners to ask Legal Aid for help. Sanchez said she was “guaranteed” a television service that would provide numerous channels--including pay channels like Showtime, HBO and the Movie Channel--free. She and her husband, Jesus, signed a contract requiring them to pay $105 a month toward repayment of their debt of about $5,000, a loan that carried a 19% interest rate.

A month after the installation, the sound on the pay channels disappeared. Despite repeated phone calls, the company failed to fix the system, Sanchez said. Although the couple, who made 10 payments, wanted to cancel everything, they feared such an action would ruin their credit.

“They promised us one thing, but we got another,” Sanchez said. “You see the channels but you couldn’t hear them. What good does that do? They guaranteed us the channels would work.

“They said they’d take care of it but they didn’t. . . . We just want justice done.”

Legal Aid attorneys characterized the lawsuit as one of the most significant consumer fraud cases involving the Spanish-speaking community they have filed in San Diego County.

Called Latest Scam

“This is the latest and one of the largest door-to-door scams focusing on these people,” Shoesmith said. “These con artists will get ahold of a list of homeowners with Spanish surnames and target those people.”

Shoesmith said that, before filing the lawsuit, Legal Aid sent letters to both companies giving them an opportunity to remedy the situation. She said there was no response from California Satellite Systems and that Beneficial California said its “version of the facts was different” and continued collecting payments.

Times Staff Writers Armando Acuna and Tom Gorman contributed to this story.