BlueHippo Blues
On Sunday, I wrote about BlueHippo and the unending complaints that are still coming in about the Woodlawn-based retailer that sells computers and other electronics to people with poor credit.
Maria Allwine of Baltimore wrote in to say:
How about a story on who owns Blue Hippo and its history. I think publishing the names of the owner(s) and the history, finances, etc. of this company might be helpful.
The bad news is that I didn't include that information because I only have 25 inches of space to work with for my Sunday column. The good news is that The Sun and fellow blogger (a.k.a. Financial Guru) Eileen wrote a terrific story on this very question back in 2006.
But, being the generous, thoughtful soul that I am, I'm going to copy and paste the lengthy article after the jump instead of making you search and pay for it in our archives like my bosses would like for you to do. Why? Because it's all about you readers, that's why.
BlueHippo Funding LLC, a Woodlawn company that sells computers and plasma TVs nationwide to people with poor credit, is under investigation by the Federal Trade Commission after being hit with hundreds of consumer complaints in its three years in business.In addition to the federal probe, the Illinois attorney general's office sued the Baltimore County company late last year, Florida has begun an investigation and, last week, two Californians sued BlueHippo and are seeking class-action status to represent thousands of consumers.Launched in April 2003, BlueHippo grew quickly through radio and cable television ads that pitched computers to those without access to traditional credit. Consumers pay through electronic debits to their bank accounts over one year. The company promises to ship merchandise once customers make three months' payments worth hundreds of dollars.
Early on, however, consumers began to complain that they didn't get their computers and weren't able to get refunds, and complaints have persisted.
The Better Business Bureau of Greater Maryland says it has logged 799 complaints in three years, making BlueHippo their most complained-about company. "We get calls every day," said Kerri Kelly, public relations manager with the BBB in Baltimore.
In August, the FTC subpoenaed Wachovia Bank for records relating to BlueHippo, according to a letter from FTC Secretary Donald S. Clark posted on the agency's Web site. BlueHippo, according to the letter, said the records were irrelevant to whether it had violated laws against deceptive mail or telephone ordering, and it tried unsuccessfully to quash the order. As recently as early March, the FTC was collecting evidence from consumers.
FTC officials say they don't comment on whether an investigation is taking place. But Clark, in his letter, stated, "BlueHippo's claim that this investigation is limited to issues related to the `timing of sales and shipments and delivery' ... is simply wrong."
BlueHippo's spokesman, Michael Waldron, would not comment about an investigation but said, "If an appropriate regulatory agency has a question with regard to the company's practices, BlueHippo fully cooperates with them in the interest of clearing up any concerns they may have."
BlueHippo said it caters to consumers earning an average of $40,000 but with a history of credit problems. The typical customer's credit score is 455, a level considered extremely risky, the company said. It said staffers explain the sales terms, including its no-refund policy. The number of complaints is small compared with the 160,000 customers served in the past three years, Waldron said.
"The company offers consumers with credit challenges the opportunity to purchase very expensive electronics when no other retailer or lender will," Waldron said.
Critics complain that BlueHippo prices its computers at three to five times the retail cost, so by the time customers get their computer they've already paid more than it's worth.
The higher prices reflect the higher cost of doing business with poor credit risks, the company said. It says more than 40 percent of its customers don't complete the payment plan once they receive the computer. About one-third give false bank account information, or the first payment is returned for insufficient funds, the company said.
One dissatisfied customer is Stacey Simms, who responded last year to BlueHippo's pitch.
"I said, `It must be legitimate. They have a TV commercial and are on the radio all the time,'" said Simms, a clerk with the Prince George's County vital records office.
She said she paid about $125 upfront, and $84 was debited from her bank account every two weeks. Simms said she was initially told she would get a computer after her first payment. But the delivery dates kept changing, extending out to three or four months, she said.
She complained to the Better Business Bureau. She also stopped payments despite BlueHippo's no-refund policy. "It was a hard decision. They had $500 of mine that I would never see again," she said.
Simms told the company she was reporting it to the Better Business Bureau. The next day, the company told her the computer had been shipped. She has the computer, but the experience has left her angry. "I was noticing they still have their commercials. How are they surviving?" she said.
After receiving 15 complaints, the Illinois attorney general sued BlueHippo and its president, Joseph K. Rensin, in November, accusing them of deceptive sales tactics. The lawsuit seeks to bar them from making sales in the state. "It seemed that these consumers were very much taken advantage of. That's why we acted quickly," said Melissa Merz, a spokeswoman for the Illinois attorney general.
Florida's attorney general's office, with 17 complaints against BlueHippo, launched an investigation in December.
Maryland's attorney general's office has received 257 complaints about BlueHippo but has not filed a lawsuit. Most of the complaints are from out of state, and 82 were resolved through mediation. Spokesman Kevin Enright said his office can't discuss any action it has taken or will take against BlueHippo.
BlueHippo's practices violate state consumer laws across the country, said David Marshall, a Washington consumer lawyer representing the Californians suing BlueHippo.
"State-level regulators should have taken action against this company long ago and prevented them from cheating so many people as they have out of their money," he said. "That's the reason we are doing this lawsuit."
Filed in the U.S. District Court in California, the lawsuit seeks class-action status to represent thousands of California consumers who never received their computers and potentially lost millions of dollars, Marshall said.
BlueHippo claims to sell top-of-the-line computers when in reality the machines are basic or outdated models, the lawsuit states. Consumers can end up paying nearly $2,000 for a computer that sells for $400 or less in the stores, the suit alleges.
Customers aren't told of critical sales terms, such as the price of the computer. And those who back out of the deal never get a computer or the return of their money, the lawsuit states.
"I can't think of another situation where people make weekly payments for a number of months then, if they default, they don't get their money back," Marshall said. Consumers would be better off buying a computer on a retail lay-away plan, he said.
Kelly Cannon, a medical assistant for the Sacramento County Sheriff's Department, said she saw BlueHippo's TV ad last year and liked the offer of low payments and delivery in weeks. BlueHippo debited $99 from her checking account upfront and arranged to withdraw $100 every two weeks.
But when the sales agreement arrived for Cannon's signature, the terms were difficult to understand and she complained to the company about its misrepresentations, the lawsuit states. She agreed to sign the agreement, though, when a BlueHippo representative told her she would forfeit the money she had already paid if she didn't sign. The lawsuit states that the computer BlueHippo proposed to sell Cannon for $1,970 was available directly from the manufacturer for less than $500.
Blue Hippo also kept switching her delivery date, Cannon said. Finally, when a date was set, Cannon said, she stayed home from work to wait for the computer that never came. She continued to complain to the company. In the end, she never received a computer or the return of the $600 she had paid. She wrote to the company's president, asking for her money back. She also wrote to top Maryland officials.
"The reason I did, I was so upset. If [BlueHippo] can do this to me, how many other people are they doing this to?" she said. "They need to be stopped."
The FTC's New York office asked this month for Cannon's statement for its investigation.
BlueHippo's Waldron said the company won't comment on the specifics of the lawsuit. But BlueHippo "vigorously disagree[s] with the premise and assertions in the complaint," he said.
eileen.ambrose@baltsun.com
Categories: Complaints, Computers, Consumer protection, Debt, Naughty businesses/NBotW
Comments
blue hippo are fraudulent. And liaers They do not keep their promises. There staff members are rude they have stolen 1.900 dollaers from my girl freind 2years a go. They promesd a computer to this day she has not recived any computer. Its time to take action and sue the hell out of these ---holes.
DD: Speeeeed (sorry, I'm a fan, too), I had to edit your little curse word out... For everyone else, I'm sure you can figure out what he said. You could substitute the word "butt" for it, but I'm still not sure the paper would approve.
Posted by: speedracer1753 | August 4, 2008 11:26 PM
The company offshore call centre is in Lahore, Pakistan. People with pathetic accents and 0 customer handling picks up the call and don't answer the questions you asked and are rude.
They got a week training of basic US state abbreviations and stuff but don't know nothing about US. They claim they are located at 7000 Security Blvd. Baltimore MD. But don't know any place of Baltimore or senator name or even some of them don't know the time in Baltimore.
They should be stopped doing the business as in MD, IL, WV and some other states. If you ask them Can you ship the computer to MD? They will give you the rebuttal: Currently we are not financing in MD.
Actually they got sued there and all the states where their financing is not available.
Here is some links including the wiki article about it.
http://en.wikipedia.org/wiki/Blue_hippo_scam
http://www.consumeraffairs.com/finance/blue_hippo.html
http://www.ripoffreport.com/reports/0/099/RipOff0099745.htm
http://weblogs.baltimoresun.com/business/consuminginterests/blog/2008/05/bluehippo_blues.html
http://articles.latimes.com/2006/mar/16/business/fi-bluehippo16
HELP EXPOSE THIS SCAM!
BBB should stop their entire business
Posted by: Ben | September 12, 2008 1:44 AM
I have a blue hippo account im about $1000 in and havnt been sent my computer. All payments have been on time. I signed the paper work that stated something about lawsuits that I really didnt understand. I was wondering if there was anything I could do.
Ken, you might consider contacting the Maryland Attorney General's office as well as the Better Business Bureau of Greater Maryland for assistance. You can also file a complaint with the Federal Trade Commission. --- lfk.
Posted by: Ken | December 14, 2008 1:54 PM
wow, very interesting. My wife actually worked for Blue Hippo for a few months back in 2003 when we were first dating. She told me then the place was a scam and the owner was a lunatic who would fire his entire customer service staff without notice on any given day.
The owner took a liking to my wife and promoted her to customer service manager, but she quit shortly thereafter when someone stole money from her purse at work and the owner did nothing about it.
We happened to ride by the Security Blvd location last week and it appears to be closed and the sign has been removed from the building. I feel sorry for anyone who has been taken in by this scam.
Posted by: BmoreMan | December 17, 2008 2:58 PM
I ordered a computer from Blue Hippo on December 14,2007. During the conversation with a representative, I noticed that he had been lying and only telling part of the payment plan. I had already given my bank info. I told them to cancel my order, but was billed 124.00.It has been a year and i'm still trying to receive my refund.
Posted by: PATRICIA W | December 18, 2008 1:18 PM
I am one of the few that is having hard time getting my computer. Its already going to be a year that i am paying for a computer that i dont have. 1,943.00 is what has come out of my bank account and no computer. I was calling everyday in month my cell phone bill went from 150 to 300 just from waiting on hold to speak with someone. Just so they can tell me my computer is being shipped shortly and it would be here anyday
Kayla, this sounds like a terrible situation ... please try the links above to find ways to file a complaint. --- lfk.
Posted by: Kayla Herrera | December 18, 2008 4:20 PM
I called Blue Hippo on May 30,2008, I decided to go ahead with the purchase of a laptop for $1,943.00 which included free gifts (color printer, digital camera, an English course, microsoft office, computer games for children, $320.00 cash back and a $200 gas gift card) and I agreed to give a down payment of $124.00 on June 10, 2008 and after that I would pay $69.98 biweekly. They told me that after the 7th payment, they would ship the laptop, and the free gifts after I paid the entire debt. I completed my 7th payment on September 19th and as of today (Dec. 23) I haven’t got the product yet. Calling customer service is a nightmare, they never answer and when they do, you have to be on hold for over 40 minutes. I have been able to talk to the Spanish customer representatives, but not the English one, all they have is a recording of a customer rep. talking to a “customer” answering frequent question. In the middle of November I called the Spanish number and I talked to Karina Leon (I guess that she's the only "rep" because she answers every time I call) and ask her about the status of my order and she told me that the laptop was on its way, that I would get it soon. On Dec. 1st, I was already worried since that laptop was the Christmas gift for my son, and the lady told me that the system shows that the order was being processed and that they would ship it soon…..SOOOOO!!!!…. they LIED TO ME???, how come the computer was on its way on November and 2 weeks later it’s ready to be shipped??? That really pissed me off and that’s when I started to look on the internet (yes, I know….something that I should have done before buying it!!), and I found that everything is a scam, they do send the products, like after a year, but the product that you buy from them is not even worth half the price you’re paying. On Dec. 8th I called again, and the lady told me to wait 10 business days because my laptop was shipped that day, well, I called one more time on Dec. 23, and guess what???…they told me to wait 10 BUSINESS DAYS…..AGAIN???? I already paid $1,033.74 and I am really upset and of course, my son didn't get his Christmas present. I want my money back, but again, they don’t refund my money, and if I don’t pay everything, it will show on my credit report. I don’t care about the laptop anymore, all I want is my money back. For Godsake, we are not taking about $50!!! I’m taking about over a THOUSAND DOLLARS!!!! On Dec. 31, I called again and I told them to cancel my order because I was going to contact the BBB. She said that they can stop that but they DON'T refund the money, that I have to buy any of their products instead, so my question was, what guarantee do I have that you are going to send me a new product if you fail to send me the laptop that I bought?, she didn't answer me anything. So, what can I do to get my money back??
Posted by: Susy S. | January 4, 2009 12:55 AM
I have been waiting for my computer for over a year now. I have paid it off and never missed a payment. I am at a loss I dont what to do over $1900 is gone. I live in New Jersey. What can I do to get my money back. Bluehippo Hippo has made me feel so taken advantage of. How could they treat people this way.
Stacy, that's awful. You should file a complaint with the New Jersey attorney general's office, the Better Business Bureau and the FCC. -- lfk
Posted by: Stacy Scott | January 27, 2009 2:31 PM
I used to work for Blue Hippo in the recent years. Not everything in this article is correct. The consumers must be able to take SOME responsiblity for there actions. Because, in fact, they are the ones who decide to order in the first place. Each sales call is recorded and check for quality assurance. The consumer must agree before the sales call is complete.
Posted by: N/a | February 19, 2009 12:19 PM
I also want to reassure, you must first build a slight credit history with the company before you receive your computer. Similar to a layaway. When the layaway ends, you will receive your merchandise and the financing begins. If you default on a payment it will delay your layaway and shipping. It's clearly stated in the terms of the agreement.
Many customers say they did not receive their merchandise even after completing the payments. --- lfk.
Posted by: N/a | February 19, 2009 12:34 PM
Blue Hippo has taken over $2,000.00 out of my account and i have counted them over and over and they continue to give me the run around. Bliu Hippo have not sent any type of computer or returned any type of funds to me or my account. Ihave seeked and attorney on this case. What do we do?
Shawn, you should contact the state attorney general where you live, as well as the Better Business Bureau and the FTC to file a complaint. Check the links above! --- lfk.
Posted by: Shawn Mullins | March 2, 2009 8:46 AM
If you don't no anything about this company. They will get you to. Because everything sound so good. This company have took over my money to. But i notice something crazy about this company.So i put a stop to this . Everything seen so real. So i cancel my order. But i were told no refunds. So i had to order something else off their website. To cover my money. I order an flat screen tv. But i had to send the balance before i can receive my tv. So i sent and money order. But still right today. No tv or refund.I hope people in Alabama read this. Please don't get trick. Just save your money until you have enough to pay cash for you an computer or tv. Thanks
April , 2009
Posted by: Deborah | April 15, 2009 9:58 AM
I am in a similar situation -- my husband heard about the deal and ordered without me knowing. A year of payments and he calls to let them know we no longer want the laptop. About $1000 in and with no refunds we decide to order a TV off their website. Sent in a money order to complete the tranaction. After waiting over a month and finally myself calling and beginning to discover what a HORRIBLE company this is, I start searching online -- the complaints are endless. I emailed their cst service and finally explained that I would be either contact the BBB and should either find a refund check in my mailbox in three business days or a tv on my doorstep. BBB comes back and says Blue Hippo immediately closed the complaint and it will remain unanswered. Crazy thing? All of a sudden a Fed Ex door tag is left at my door for a 9 lb box from Dell shiped from NV. Called Fed Ex -- my name & address is off but its my package. (Read online from another Blue Hippo vicitim that they ship it to the wrong address on purpose and then blame you when you dont get the package.) I'll keep you updated but I suspect they shipped some cheap computer to me instead of the 42" flatscreen tv i wanted. We'll see this weekend!
Good luck, Frustrated ... -- lfk.
Posted by: Frustrated to the extreme!! | May 22, 2009 5:19 AM
I paid for my purchspase Feb. 2008 in total and months earlier than the final payment was due and to this very day (7-15-2009)I have yet to receive my $300 rebate,flat screen television and color printer. All the calling in the world doesn't help I hope some court gets all of our money back and shut this bogus company down.
Posted by: Andrea White | July 15, 2009 5:34 PM