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FTC Wants BlueHippo Held in Contempt

(CN) - The Federal Trade Commission wants BlueHippo to be held in contempt for luring customers into signing computer financing agreements and then never delivering the computers, the agency announced in a press release.

BlueHippo promised financing for laptops and other personal electronics with a low down payment, collecting $15 million from customers in 2008, but never ordered the products, according to the FTC.

The company kept making fraudulent promises after settling an earlier claim that it violated federal credit laws. The April 2008 settlement called for a $3.5 million payout to consumers and made BlueHippo promise to quit using deceptive marketing tactics.

After last year's settlement, BlueHippo has been "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 FTC says.

Between April and December 2008, BlueHippo allegedly signed up 35,000 customers while still never delivering a single computer.

Only after the FTC issued BlueHippo a warning in April 2009 did the company start ordering computers, the commission claims.

According to the FTC, BlueHippo Funding and BlueHippo Capital told consumers they putting $99 or $124 down and making weekly or biweekly payments of $36 to $88 would secure them a laptop or other product, which would be delivered after consumers made 13 consecutive payments. But of the 2,477 who made the required payments, the FTC said, only 1,462 received computers, which were delivered months late.

"Years of broken promises by BlueHippo have left consumers seeing red," said FTC Chairman Jon Leibowitz. "We're putting companies like this on notice: If you mistreat consumers and thumb your nose at the courts, we will hold you accountable."

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