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TheBostonChannel.com

Company Allegedly Preys On Consumers With Bad Credit

Team 5 Investigates Blue Hippo

 

POSTED: 11:54 pm EDT May 3, 2007
UPDATED: 11:08 am EDT May 7, 2007

 

The BlueHippo logo, a cartoon hippopotamusBOSTON -- A company that promises no credit check to consumers who want to buy TVs and computers is under investigation, facing allegations that it preys on people with bad credit.

 

NewsCenter 5s Susan Wornick reported Thursday that as a single Boston mom on a fixed income, Verella Moore couldn't afford a computer until she saw ads for a company called Blue Hippo, which promised no credit checks and low weekly payments.

 

"So I said, OK, I can get my credit built up and still have a computer at home for my daughter to use," Moore said.

 

Blue Hippo's deal: automatic withdrawals from Verella's checking account for three months, at which point she'd get the computer. To sweeten the deal, Blue Hippo would also give her a free printer and plasma TV.

 

"I was really excited, you know, because everyone wants a flat screen TV."

 

But after paying a total of almost $2,300, Verella got the computer but she never got the TV or printer. It has been more than a year.

 

"So this company took your money and didn't deliver what they promised?" asked Wornick.

 

Moore replied, "I've gotten no response. No telephone calls. No nothing."

 

Joanne Cannistraro tells Team 5 Investigates a similar story. "They told us the great deal they had for us," she said.

 

Cannistraro also signed up to for a Blue Hippo deal. Like Verella, she was promised a new computer, and free printer and flat screen TV if she made payments up front for six weeks.

 

"We had to give them our checking account information," she said.

 

But after deducting money from Joanne's account for 12 weeks, taking a total of $600, Blue Hippo delivered nothing except excuses. Joanne was forced to close her bank account to keep them from taking any more of her money

 

"It's definitely a fraudulent company," Cannistraro told us.

 

Joanne and Verella are not alone. Team 5 Investigates traced Blue Hippo to its corporate headquarters in Maryland, where we found hundreds of complaints since it opened for business in 2003.

 

"Blue Hippo currently has an unsatisfactory report with the Better Business Bureau," said Angie Barnett, CEO of the BBB of Greater Maryland.

 

And, more than 1,200 complaints. The allegations include failing to deliver merchandise, making unauthorized withdrawals from consumers' bank accounts and failing to make refunds, while targeting specific consumers.

 

"Let's use the example of a single mom with small children," Barnett said. "She wants technology in the home. She is trying to do the best for them. She doesn't have the capacity for putting it onto a credit card, establishing credit. So this makes it fast and easy."

 

And expensive. Blue Hippo sells a Panasonic television for almost $3,200. It's only $2,799 through Panasonic. Same with this Apple Mac Book: $2,599 at Blue Hippo, but only $1,999 at the Apple store.

 

Blue Hippo refused an on-camera interview so we couldn't ask them about their pricing policies. Instead, they sent a statement, saying Blue Hippo "was founded to fill a gap between people with bad credit and products that they need to improve their lives." As to the many complaints, Blue Hippo said it "works closely with the BBB to resolve customer issues as they arise."

 

But the Attorneys General in West Virginia and Illinois are not impressed . They're suing Blue Hippo, alleging the company "preyed on consumers with bad credit charged far more than the actual retail price of electronics, and refused to refund payments."

 

"They really don't need to be around. Taking advantage of people is very wrong," Moore said.

 

After our calls Verella received her printer and Blue Hippo tells us her TV is on the way. They also promised Joanne a full refund.

 

If you've had problems with Blue Hippo, the Federal Trade Commission wants to know. You'll find a link to file a complaint below.

 

Resources:
 

 

  • Web: FTC Consumer Complaint Form

     

  • Web: Search Complaint History

    •  

    BlueHippo Funding

    From Wikipedia, the free encyclopedia

     
    Jump to: navigation, search
    The BlueHippo logo, a cartoon hippopotamus
    The BlueHippo logo, a cartoon hippopotamus

    BlueHippo Funding, LLC is an installment credit company for customers with poor credit that offers personal computers, flat-screen televisions, and other high-tech items, typically priced far above market standards. The company has encountered several complaints with the Better Business Bureau; as a result, the Greater Maryland Better Business Bureau issued a consumer alert against the company within eight months of its founding. [1]

    Contents

    [hide]

    [edit] Product costs

    Their main product is a personal computer system for which they charge a total of $2178.48 including interest, subject to late fees. Radio commercials state that a customer must build a "short credit history" to qualify. The payment is made through a long installment plan. Initially, customers pay a $99 down payment, followed by 13 weekly payments of $39.99. This is followed by 3 to 12 variable payments. Customers then make a final pre-shipping payment, followed by a week-long waiting period, before the system is physically shipped. Post-shipment, customers must make 52 more weekly payments (1 year - see chart below). Comparable computer systems generally cost $400 out-of-the-box. [2]

    The current models they are offering (as of March 2007) are discontinued HP desktops (HP Compaq dc5100 specs:Intel3.06Ghz, 256 MB RAM, Windows XP Home, CD combo drive-more info at HP website) and laptops (unknown HP model- Intel 1.73 Ghz, 512 MB DDR1 RAM, CD combo drive).

    The free LCD TV is an Olympia model worth about $300-$350 and a Lexmark printer (less than $50).

    There are late fees of $20 for late payments, and late payments automatically void the offer of a free TV and printer.

    They are also popularizing their products by sending flyers informing customers they just won a sweepstakes and when customers call, they are redirected to sales representatives.[citation needed]

     

    [edit] 'No Refunds' policy

    BlueHippo changed its business practices to include a refund policy in mid-2006. Under the new policy, customers may elect to receive a full refund of the money paid during the layaway period, after paying a $175 early termination fee. The fee is disclosed and agreed to by customers at the time of their order. In order to be eligible for a refund, customers must cancel their purchase contract prior to the computer being ordered.[3] However, the BBB reports : "In November and December 2006, however, the volume of complaints rose again and the BBB has renewed concerns about the effectiveness of the company's efforts to reduce the volume and pattern of complaints. Current complaints allege the company is slow to provide promised refunds and there continue to be delays in delivery of the merchandise."[1] UPDATE: As of March 1st, 2007 Blue Hippo's website no longer offers a refund, however any order canceled before it is shipped will receive "store credit" only. This store credit will only allow customers to buy computers at highly inflated prices.

    Rule of thumb: Weekly price of computers X 52 weeks will be the price of the computers on their website

    [edit] Website Security problems

    For at least 6 months, their website claimed to implement SSL security for online payments while no such security was actually in place; it is still optional, and not the default.[citation needed] Customers ordering online must submit complete bank checking account information, employment information, income, their home phone number, and Social Security number.

    The website also appears to lack the ability to view financing terms such as annual percentage rate and finance charges.[citation needed]

    [edit] Total Payment Calculation

    Payment Summary
    Payment Component Cost Running Total
    down payment 99 99
    13 weekly pre-order payments 519.87 618.87
    max 12 total payments after ordering before they ship (for "auditor approval") 479.88 1098.75
    payment during week Blue Hippo requires to credit a payment 39.99 1138.74
    payments to cover any payments to date that BlueHippo claims were missed or late ($20 each)  ? 1138.74+?
    payments during wait for the system to be physically shipped 39.99 1178.73+?
    remaining payments until they've made a full year's worth of payments (52 weekly payments) 999.75 2178.48+?
    payments to cover any further missed or late payments  ? 2178.48+?
    Grand Total   2178.48+

    [edit] Recordings of Customer Calls

    Recordings have been made by BlueHippo, LLC (without permission) of conversations with customers, and some of these have been archived via transmission to overseas locations.[citation needed] These recordings are not available for review.[citation needed]

    Blue Hippo reserves the right to start a contract once contract script at end of call is read to customer, and most customers don't receive their papers until well after deductions are made from their accounts.[citation needed]

    [edit] References

    1. ^ a b Blue Hippo's BBB listing. Retrieved on 2007-01-24.
    2. ^ Jaffe, Chuck (2004-10-12). High interest doesn't compute. MarketWatch. Retrieved on 2006-09-22.
    3. ^ BlueHippo Funding (2006-06-27). BlueHippo Funding Announces New Sales Practices. Retrieved on 2006-09-22.

    [edit] External links

    Retrieved from "http://en.wikipedia.org/wiki/BlueHippo_Funding"

     

     

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