On September 9, 2025, the Court of Appeal of the State of California upheld California Attorney General (AG) Rob Bonta’s trial-court victory against a business and its owner for violations of California’s unfair competition law (UCL) based on allegations of the illegal sale of credit insurance, which largely targeted the business’s Latino immigrant customer base.
The business, Adir International, LLC dba Curacao, and its owner, Ron Azarkman (collectively, Curacao), operated a chain of retail stores that sold electronics, appliances, furniture, and other home goods in California, Nevada, and Arizona. In 2006, Curacao began selling “debt suspension and debt cancellation” products with retail installment accounts and retail installment contracts. These products, which cost from $4/month to $29/month, allow customers to defer payments on a credit account for certain events (e.g., unemployment, family leave) or to cancel the debt under certain circumstances such as death or disability. According to the complaint, many customers had no idea they were enrolled in such programs.
For those customers who used the credit insurance product, no payments under the installment contract would be due until the deferment came to an end. Once the deferral period ended, the consumer would then resume regular monthly payments. However, Curacao continued to charge the monthly fee during the deferral period. By collecting the fee during the deferral period, the consumers ended up paying more in fees than they would have paid in finance charges, effectively increasing the cost of financing. The credit insurance was very profitable for Curacao. In fact, within a 10-year period the evidence at trial showed that Curacao made a profit of $83,591,688 from the program while the benefit to consumers during the same period was $2,245,403 (2.7% of the fees charged).
Based on these facts, Bonta alleged, and ultimately proved at trial, that Curacao was liable for 318,807 violations of California’s unfair competition law (a violation for each credit insurance policy sold), which were predicated on violations of the California Insurance Code. The trial court awarded $25 per violation, amounting to $7,970,175 in penalties. The Court of Appeal affirmed.
Although trials brought by state AGs under consumer protection laws are relatively uncommon, this case highlights the challenges that defendants may face when up against a state AG in court. State AGs often have an advantage in pleadings and evidence, which are frequently bolstered by the defendant’s previous responses to a civil investigative demand or subpoena. Additionally, courts and jurors tend to give significant deference to state AGs during trials. Companies involved in litigation against a state AG should recognize that the dynamics differ significantly from private litigation and should engage outside counsel experienced in handling such matters.
