I have taught in many South American schools and all of my students spoke to me in Spanish outside of the classroom. I have met a few South Americans who have pretended not to be able to speak Spanish. I think this is down to a number of reasons, but the main one being snobbery. They like to push a sense of superiority over their Spanish counterparts, in some cases ignoring their own language to do this. A lot of Latin Americans seem to think that the USA is the be all and end all and if they can speak the English language then their worries will be over. Accept the fact that they just don't want to speak to you in Spanish and get in with teaching English. Simple.