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FTC sees red, BlueHippo owes green

Jeremy Simon

BlueHippo advertised its services as a way for consumers with bad credit to finance the purchase of personal computers and other consumer electronics. According to consumer complaints, it didn’t follow through on those promises.

Now, BlueHippo Funding LLC and BlueHippo Capital LLC owe up to $5 million for consumer redress to settle Federal Trade Commission charges that the firms allegedly broke an impressive list of rules, including the FTC Act, the FTC’s Mail Order Rule, the Truth in Lending Act, Regulation Z, the Electronic Fund Transfer Act and Regulation E.

According to a press release outlining the FTC complaint, BlueHippo “offered to extend credit to consumers to finance purchases of personal computers and other consumer electronics with down payments of $99 to $124 and a year of weekly or biweekly payments ranging from $36 to $88.” But those credit offers frequently turned out to be little more than empty promises. “Many consumers who ordered products paid hundreds of dollars and received nothing in return, the complaint alleges.”

Customers allowed BlueHippo to make automatic, periodic debits from their bank accounts in order to fund the product purchases, with BlueHippo promising to make a delivery once the customer had made 13 weekly, or seven biweekly, payments.

Customer complaints show that BlueHippo failed to deliver its products as promised, even after the necessary payments were made. Kisha from Atlanta writes on the Web site Ripoff Report that she expected a computer delivery from BlueHippo after her final installment of on time payments. “Four to six weeks after that my computer should have been in my house by the end of November 2007. It is now Dec. 11 and I still have no product. I have called them on five different occasions and each time I call, I have been given the runaround,” she says.

In addition to complaints about not providing merchandise, the FTC press release says BlueHippo often took money out of consumers’ account without first explaining that consumers would not be entitled to a refund even if they canceled before delivery for any reason.

Under the proposed stipulated final order and settlement, BlueHippo is prevented from misrepresentations in the marketing of consumer electronics and owes the monetary judgment of up to $5 million. That money “will be used to provide redress to consumers who entered into contracts with the defendants before March 2006, made payments, and did not receive the ordered products, refunds, or other restitution,” the FTC press release says.

Another post on Ripoff Report noted the consumer’s credit report showed an unpaid debt to BlueHippo. Consumers should be aware that they have the right to challenge any credit report errors, with the credit reporting agency required to remove any disputed information that cannot be verified.

A call to BlueHippo’s press line for comment was not returned before this blog was published.

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  • Mr. Joseph Anderso

    Blue hippo is still at it what measures do we hav to take to put a stop to this once and for all. This is great 5 million dollars for people who entered contract BEFORE March 2006! But What aboout those who entered contracts after that date? I assure you that this is still happening because i have fell victim to this haneous crime just recently. Where is the protection for ther consumer? This settlement states under the proposed stipulated final order and settlement, BlueHippo is prevented from misrepresentations in the marketing of consumer electronics r the consumers. They are still misrepresentating so what happens now? Shut them down this company is mor scandalous then enron!

  • Thanks for your comment. Based on a conversation I had with Federal Trade Commission spokesman Frank Dorman, the settlement is “probably it as far as FTC vs. BlueHippo” so that consumers who dealt with the company after March 2006 may be out of luck. However, if you haven’t already, Dorman suggests filing a complaint with the FTC, your state attorney general’s office or the Better Business Bureau.

  • Dorothy M DEEL

    I on 3\26\2009 call the Bluehippo and order a comcomuter but they did not tell me that I could not get my momey back so they took my momey out my accoutn .an the same day I call them back and canell the order and the girl told because they did not have the order in .so she told me they would not take my momey .but the next momth they took the momey out and i;an on a tight buget i ;am disable and have littel momey to spend to .Iwrote then and told them that .Icall the same day and told me that they would not give my momey back but whah told me that would give me a store credit. but you do not get a store credit at all so they took my momey and no computer and no store crdit . so bacis they took my momey so I thing they stole momey .and see they took my momey out beford Isign any papers .you no this is a crime and all i want is my momey back . so I guess.Ianout of momey but you all need to stop these pepole .from take pepole momey I thank you