BlueHippo's bad credit, no credit, no problem advertising pitch results in no computers for some customers.
Consumers who took the bait for BlueHippo's with "less than perfect credit, bad credit, no credit" pitch to finance computer purchases appear also to have received no computers. It'll cost BlueHippo as much as $5 million.
In a settlement reached with the Federal Trade Commission Feb. 25, BlueHippo agreed to a judgment of at least $3.5 million. If consumer claims exceed $3.5 million, the defendants will be required to pay up to an additional $1.5 million to pay those claims.
In addition, BlueHippo is barred from misrepresentations in the marketing of consumer electronics or any product requiring four or more periodic payments before shipment.
According to the FTC complaint, BlueHippo required consumers to agree to a series of automatic debits from their bank accounts to purchase their products. After 13 weeks of payments, according to BlueHippo's advertising, consumers would receive their computers.
What BlueHippo did not disclose, however, was that consumers would not receive a refund if they cancelled before delivery of the product, regardless of the reason for the cancellation.
The FTC claims BlueHippo failed to clearly and conspicuously disclose their policy of not providing refunds before debiting accounts, in violation of the FTC Act. In addition, consumers had no opportunity to make a decision about whether or not to risk the potential loss of advance payments.
The settlement also requires BlueHippo to stop collecting money from purchasers who are entitled to redress and to stop furnishing derogatory information about such purchasers to credit reporting agencies. The settlement also requires BlueHippo to notify any credit agency that the person's account is in good standing. The settlement contains monitoring and record keeping provisions to ensure their compliance.