BlueHippo Funding
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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]
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[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 do 52 more weekly payments (1 year - see chart below). Comparable computer systems generally cost $400 out-of-the-box.
The current model they are offering right now are the cheapest 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, 512mb DDR1 RAm, CD combo drive)
The free LCD TV is an Olympia model worth about $300-$350 and a Lexmark printer (less than $50).
Also to all customers, there are hidden late charges of $20 for late payments and late payments will automatically remove the free TV and printer entitled to customers.
Customer care is also non-existent so customers can hardly cancel their orders.
THEATHERNOW is also another sister promotion related to this company.
They are also popularizing their products by sending flyers informing customers they just won in the Sweepstakes and when customers call, they are redirected to sales representatives.
([2]
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."[4] 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 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. [5] A current order page. Customers ordering online must submit complete bank checking account information, employment information, income, their home phone number, and Social Security number, and submission of this type of information over insecure lines is a particularly dangerous invitation to internet fraud and identity theft.
The website also appears to lack the ability to view financing terms such as annual percentage rate and finance charges. If true, this would be a violation of federal regulations. Truth in Lending Act
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 ? 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. These recordings are not available for review. All calls are recorded. Blue Hippo reserves the right to start a contract once contract script at end of call was read to customer and most customers don't receve their papers well after deductions are made to their accounts.
[edit] References
- ^ Blue Hippo's BBB listing. Retrieved on 2007-01-24.
- ^ Jaffe, Chuck (2004-10-12). High interest doesn't compute. MarketWatch. Retrieved on 2006-09-22.
- ^ BlueHippo Funding (2006-06-27). BlueHippo Funding Announces New Sales Practices. Retrieved on 2006-09-22.
- ^ 1
- ^ Internet Archive.
