BBB Alerts: BlueHippo Failing To Deliver On Promises

The Connecticut Better Business Bureaus (BBB) is cautioning consumers regarding BlueHippo Funding, LLC (BlueHippo), a financial services company offering computers, electronics, and other merchandise via a hybrid layaway and installment financing plan aimed at low-income consumers and those with poor credit ratings.

The BBB System has logged more than 1,400 complaints from all 50 states against BlueHippo in the past three years. Due to this pattern of complaints and BlueHippo’s failure to correct the underlying causes for the complaints, the company is rated “unsatisfactory” by the BBB System.

“More than 65 percent of the complaints against BlueHippo fall into one of three categories; high pressure sales practices, nondelivery of promised merchandise, and unwillingness to provide a refund or exchange,” said, Paulette Hotton, president of the Connecticut BBB. “Basically, consumers tell us they are being sold on a product and payment plan, aren’t getting what they’ve paid for in a timely manner, and have no way to get their money back.”

BlueHippo — a Maryland-based company advertising nationally through television, direct mail, and the Internet — targets individuals or families with fixed or low incomes, as well as people with little or no credit. It has been reported that prime prospects appear to be families, typically with about a $25,000 per year annual income.

Before any merchandise is shipped, BlueHippo requires customers to establish a record of nine consistent payments — usually in the form of an initial deposit followed by weekly payments — all of which are debited directly from consumers’ checking accounts.

Along with what appear to be affordable financing offers for well-known brand-name computers and other electronic equipment, BlueHippo also entices consumers with promises of free televisions, printers, or other home computer and electronics merchandise. The computers the company finances are generally low-end models, and many consumers allege that due to BlueHippo’s financing payment schedule, they generally pay up to four times more than the computer would actually cost had they bought it in-store.

BlueHippo notes that consumers may cancel at any time within the initial nine-week deposit payment period. Company policy does not allow for refunds, however, and instead gives customers “credit” to purchase products available on the company’s website. As a result of this policy, BBBs are now beginning to receive additional complaints from consumers who never received the merchandise they bought with their store credit.

Many complaints to BBBs allege problems in receiving promised merchandise. As an example, a Maryland woman reported that she paid the company $2,200 for what she claims was a $600 computer. Through electronic debits from her checking account, she paid BlueHippo an initial fee of $99 and then $41.98 per week to establish a credit history. Ultimately, the computer was delivered, but four months late, and only after she contacted the company numerous times. Now, six months after making her final payment on the computer, she has yet to receive the free 20-inch plasma television and printer promised by BlueHippo.

“While BlueHippo has attempted to address complaints, and has delivered some merchandise, overall the company does not meet BBB standards for marketplace behavior and is not measuring up in terms of trust with consumers,” said Ms Hotton.

The BBB is not the only organization scrutinizing BlueHippo’s business practices. A recent settlement reached between the Maryland Attorney General’s office and BlueHippo requires the company to offer restitution to Maryland consumers.

BlueHippo denied that it engaged in any unfair or deceptive trade practices or otherwise violated the law, but did agree to settle and has since discontinued selling to consumers in the state of Maryland.

Several other attorney general offices have now subpoenaed BBB complaints, with lawsuits having been filed in a number of states. As well, the Federal Trade Commission (FTC) reports that it has accumulated 8,000 pages of consumer complaints about BlueHippo.

For more information about BlueHippo, to see its BBB Reliability Report, or to file a complaint against BlueHippo, or to check out one of the more than three million other BBB Reliability Reports on businesses, go to www.bbb.org.