March 8, 2013

Mayor Emanuel Announces Results of Sting Operation Targeting Fraudulent Immigration Service Providers

As National Consumer Protection Week Draws to a Close, Investigation Example of Emanuel Administration’s Improved Enforcement and Reforms Geared Toward Protecting Vulnerable Consumers from Predatory Businesses

Mayor's Press Office    312.744.3334

Mayor Rahm Emanuel today announced the results of a citywide investigation of immigration service providers. This investigation of immigration service providers, often called “notarios,” is the latest in Mayor Emanuel’s efforts to protect Chicago consumers from predatory businesses.  The Emanuel Administration is announcing the results of this latest consumer protection operation during National Consumer Protection Week, a national effort to encourage consumers across the country to know their rights and make better-informed decisions.

“I refuse to allow fraudulent immigration assistance providers to take advantage of individuals just looking to access the American Dream,” said Mayor Emanuel. “Enforcement efforts like this ensure that consumers get a fair shake and that businesses that cut corners or defraud consumers will be held accountable. “ 

The Department of Business Affairs and Consumer Protection (BACP) targeted 54 known immigration service providers and found that 44 percent of the businesses visited by City inspectors were not in compliance with the City ordinance regulating immigration service providers.  BACP issued 77 charges on 42 Administrative Notices of Violations, with fines for each violation ranging from $200.00 to $10,000 per offense. 

These businesses violated consumer protection requirements strengthened by Mayor Emanuel’s licensing reform ordinance, which the City Council authorized in May 2012.  This reform requires immigration assistance providers to provide and display specific disclosures regarding costs and legal issues in many languages as well as a customer’s right to file a complaint. Undercover investigations also revealed businesses charging exorbitant prices, providing unauthorized legal advice and promising service results that would be impossible to obtain.  BACP will be issuing new, stricter regulations for immigration assistance providers this week.

Since taking office, Mayor Emanuel passed new ordinances that imposed tough but fair consumer protections, expanded relationships with state and federal consumer protection agencies, and restructured the City’s inspection protocols. 

Enforcing the Law in a Smarter Way by Focusing on Problem Businesses

The Mayor’s licensing reform ordinance shifted the focus of the city’s consumer protection enforcement from businesses with minor licensing violations to those businesses that defraud their customers.  Mayor Emanuel’s reforms imposed new requirements on immigration assistance providers and greatly increased fines for tobacco retailers who sell to minors, pawn brokers who possess stolen goods, and second hand dealers who defraud the public and break the law. 

In addition to its reforms of the City’s Municipal Code, the Emanuel Administration has also revamped its enforcement strategy.  During the summer of 2012, BACP launched the Flagged Business List, which publicly lists businesses with numerous consumer complaints and frequent ordinance violations and subjects them to increased scrutiny by all City inspectors.  Since launching the Flagged Business List, over 67 businesses have been flagged, but more importantly, 12 businesses have worked their way off of the list and have been compliant for more than 12 months.

Protecting the City’s Working Families

The Mayor also passed a set of ordinances that impose new requirements on debt collectors, reduce the overconcentration of payday lenders and pawn shops in neighborhoods, and provide new protections for employees at risk of wage theft. Last year, Mayor Emanuel passed an ordinance to protect Chicago taxpayers from predatory tax preparers. The ordinance focuses on businesses that take advantage of taxpayers unfamiliar with the filing process by saddling them with hidden charges, unfair repayment rules and misleading information that forces consumers to use alternative, more expensive products.

Earlier this year, the City also conducted a large scale undercover operation targeting tax preparers, finding a staggering 96% of the businesses in violation of the City’s tax preparer ordinance requiring pricing disclosures and a consumer bill of rights. Over 577 violations were issued to 203 businesses.

Increased Information Sharing and Agency Coordination

In late 2012, the City was the first city in the nation to enter into an agreement with the new Federal Consumer Financial Protection Bureau to share information about emerging financial scams such as reverse mortgages, and predatory loan products. 

“As a former small business owner myself, I know that strong consumer protection enforcement is good for business because it ensures a level playing field for those businesses that play by the rules,” said BACP Commissioner Rosemary Krimbel, “That’s why the Emanuel Administration has stressed rigorous consumer protection enforcement and reforms from day one.”