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Better Business Bureau ®
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Louisville, Southern Indiana and Western Kentucky
BlueHippo Faces Contempt Charges
November 23, 2009

The Federal Trade Commission (FTC) has lodged contempt charges against BlueHippo for violating a 2008 court order by continuing to deceive thousands of financially strapped consumers with phony promises that it would help them purchase a computer even if they have credit problems.

The computer finance company has received 4,154 complaints in the last three years with the BBB. Of those, 1731 were received in the last 12 months – the same period in which the FTC claims that BlueHippo made over $15 million from consumers. According to the FTC and complaints on file with BBB, very few consumers ever received their merchandise. Many of those who filed complaints were from disadvantaged populations specifically targeted because they had not credit or poor credit.

BBB issued a nationwide warning about BlueHippo back in 2007. BBB continues to answer calls and written complaints that allege BlueHippo never delivered on promises of a new computer or other purchases. Many consumers report evidence of having sent installments that when totaled would exceed the value of the pending merchandise.

The FTC’s contempt motion alleges that between April and December of 2008, more than 35,000 customers contracted for BlueHippo’s computer financing deal. But the company provided only one financed computer. The company offered consumers credit to finance personal computers and other consumer electronics with a low down payment and a year of weekly or bi-weekly payments of $36 to $88. BlueHippo promised to deliver the product once the consumer made 13 weekly payments. But even after they made all the payments, most consumers did not receive the computers they ordered in the time promised. The FTC contends that BlueHippo used deceptive marketing tactics, and violated the FTC Act and other federal credit statutes.

The FTC also accuses BlueHippo of hiding key aspects of its refund policy. The company did not offer cash refunds but promised that consumers who canceled their order after seven days could get store credit to buy desktop computers, laptops, monitors, software and televisions. But BlueHippo failed to tell consumers that they 

would have to send a money order to cover undisclosed shipping and handling fees, as well as taxes. Even if they had enough of this credit to cover all the costs, consumers could only order one item at a time.

The FTC has asked the federal court to order BlueHippo to compensate consumers and bar it from its documented pattern of deception.

Victims of BlueHippo have clamored for justice across the country. Attorney Generals in many states have taken action on behalf of their citizens including Florida, Maryland, Ohio, Washington and West Virginia. BBB has cooperated with government officials over time regarding independent investigations into consumer accusations about BlueHippo. To view a copy of BlueHippo’s BBB Reliability Report including their complaint history and government action against the business, go to www.bbb.org or call 1-800-388-2222.