Today the FTC lodged a contempt charge against scammy no-credit-needed electronics seller BlueHippo, saying that the company hasn’t honored its prior agreement to stop scamming customers. BlueHippo agreed to pay back $3.5 million nearly two years ago to reimburse customers who never received the computers they pre-paid for, but the FTC says since then the company has sucked another $15 million out of customers.
BlueHippo has a history of not keeping promises. Here’s what happened in February 2008:
According to the FTC’s 2008 complaint, BlueHippo Funding, LLC and affiliate BlueHippo Capital, LLC offered to extend credit to consumers to finance purchases of personal computers and other consumer electronics with down payments of $99 to $124, and a year of weekly or bi-weekly payments ranging from $36 to $88. BlueHippo promised to deliver the product once the consumer made 13 weekly payments. But most consumers did not receive the computers they ordered in the time promised, even after they had made 13 weeks of payments, the Commission alleged. The Commission charged that BlueHippo’s marketing tactics were deceptive, and violated the FTC Act and other federal credit statutes.
Remarkably, the company continued to sign up customers as quickly as it had before the settlement, and between April and December of 2008 it contracted with over 35,000 new customers.
Of those, only 2,477 customers met all the requirements to eventually get computers, but the FTC says that BlueHippo provided at most only one PC to an eligible customer.
The FTC complained again in April 2009, and starting then BlueHippo began to fulfill computer requests for 1,462 qualifying customers. But even then it took up to 6 months to deliver computers to customers, when it sold the service with a promise of delivery in 3-4 weeks. The remaining 1,015 who were elgible have still received nothing.
The FTC has asked the court to bar BlueHippo from making any more sales, and to force it to repay customers. The BlueHippo website is offline as of this afternoon.