BlueHippo Funding

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The BlueHippo logo, a cartoon hippopotamus
The BlueHippo logo, a cartoon hippopotamus

BlueHippo Funding, LLC is an installment credit company founded by Joseph Rensin for customers with poor credit that offers personal computers, flat-screen televisions, and other high-tech items. 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]

Contents

[edit] Benefits of Blue Hippo

Customers who have no financing options due to their poor credit have the opportunity to purchase computer equipment on a payment plan while rebuilding their credit.

[edit] Product costs

Their main product is a personal computer system for which they charge a total of $1944.00 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 an installment plan. Initially, customers pay a $99 down payment, followed by 13 weekly payments of $39.99. At this point the computer order is processed with a 2-4 week waiting period, provided the customer has returned all paperwork. Comparable computer systems generally cost $800 out-of-the-box. The price difference is due to the high number of customers who default in the sub-prime market. [2]

[edit] Criticisms

Generally the weekly price of computers X 52 weeks will be the price of the computers on their website

The current models they are offering (as of January 2007) are Dell Desktops and Notebooks with 256MB or 1GB of RAM, 80GB or 120GB Hard Drives and AMD Sempron or Athlon Processors.

The free LCD TV is an Olympia model worth about $500 and a Lexmark printer (about $100).

There are fees of $20 for defaulted payments, and defaulted payments automatically void the offer of a free TV and printer.

[edit] Federal Trade Commission Investigation

The FTC has received 8,000 pages of complaints and launched an investigation of the company. As of February 2008 the FTC settled its grievances with Blue Hippo and required the company to pay up to $5,000,000 to settle the FTC's charges.[3]

[edit] Florida Attorney General investigation

Bill McCollum, Florida Attorney General has said, "We think that overall, this is a very deceptive trade practice." [4]

[edit] The Better Business Bureau

As of August 31, 2007 the BBB has received over 1400 grievances from all over the United States.[5] "Due to this pattern of complaints and BlueHippo’s failure to correct the underlying causes for the complaints, the company is rated 'unsatisfactory'."[6]

[edit] 'No Refunds' policy

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.[7] 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."[1] As of January 1st, 2007, Blue Hippo offers a full refund if customers cancel during first 7 days. However, any order canceled after the grace period will receive "store credit" only. This store credit will only allow customers to buy items on the company website.

[edit] References

  1. ^ a b Blue Hippo's BBB listing. Retrieved on [[2007-01-24 [1]Cofounder Bruce E. Mattare left the company in 2004 to start several similar companies, most recently TronixCountry. All of his firms have offered merchandise with installment terms similar in scope to BlueHippo.]].
  2. ^ Jaffe, Chuck (2004-10-12). High interest doesn't compute. MarketWatch. Retrieved on 2006-09-22.
  3. ^ BlueHippo Defendants Will Pay up to $5 Million to Settle FTC Charges
  4. ^ http://www.tampabays10.com/news/local/article.aspx?storyid=62287
  5. ^ http://www.tampabays10.com/news/local/article.aspx?storyid=62287
  6. ^ BBB Alerts & News
  7. ^ BlueHippo Funding (2006-06-27). BlueHippo Funding Announces New Sales Practices. Retrieved on 2006-09-22.

[edit] External links