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Succes de scandale

26 August 2013

Unlike the U.S. Consumer Protection Agency, which is just part of the Federal Trade Commission, Mexico’s counterpart, Profeco,  — in theory — is a much more powerful agency.  The acronym stands for Procuraduría Federal del Consumidor,,, Federal Prosecutor for the Consumer… and it is part of the Attorney General’s office.

While it generally had a decent reputation for resolving individual consumer complaints, it has been generally reluctant to take up class actions, until recently.  The change seems to have come earlier this summer, when the “Lady Profeco” scandal forced mass resignations in the Mexico City office, and made what had been a government agency that actually was liked a laughing stock.

“Lady Profeco” was the daughter of Profeco’s director, Humberto Benitez.  When the daughter, denied the table she wanted at a Mexico City restaurant, used her family connection to have the restaurant briefly shut down for bogus violations, the outcry from the public — mostly over the tendency of the politically connected to demand special treatment — forced Benitez into early retirement, and several high level PROFECO officials to … uh… “decide to spend more time with their family”.

Last month, PROFECO shocked Mexico City’s elites by briefly closing several high-end hotels, which were indeed violating a basic consumer protection law… posting the room price, and adding “hidden charges” to hotel bills.

Not that all that many Mexican consumers are staying in elite hotels, and discover hidden charges on their bill at check-out, but quite a few (one would say most) Mexican families have faced “hidden charges” when educating their kids.  With the push for privatization and a shortage of slots in the public universities, more and more middle-class families are sending their kids to private schools and universities, which haven’t been up-front with their costs.  Several of the elite private universities (including Tec de Monterrey) have been charged with not revealing charges, hidden contractual costs and making changes in programs without notice.  Even public schools, often controlled by “Parents’ Committees” are being investigated.  Several profit from a form of kickback, whereby the students are required to buy supplies and/or uniforms from a specific vendor, again without revealing the costs up-front.

In all, administrative processes have been started against 51 private schools and 89 businesses.

Not a bad way of restoring institutional credibility.

 

Sources:  SDPNoticias, Informador (Guadalajara)

 

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One Comment leave one →
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