Credibility of computer seller at issue

BlueHippo's TV ads draw customers, then many complaints

Equipment sold but not delivered

Company serves buyers with poor credit ratings

February 15, 2004|By June Arney | June Arney,SUN STAFF

A fast-growing Baltimore County company that has built a business using cable television ads to sell computers to people with poor credit is facing credibility problems of its own.

Dozens of unhappy customers across the nation have complained that they didn't receive their computers and have been unable to get refunds.

The Better Business Bureau of Greater Maryland has a thick file of customer complaints against the company, BlueHippo Funding LLC. The state attorney general's office in Baltimore also is looking at its practices.

Joseph K. Rensin, chairman and chief executive officer of BlueHippo, attributed the large number of complaints against the company to its large number of customers, who in a recent count topped 26,000.

"As a percentage of our sales, you have to understand it's a very small percentage," Rensin said in a recent interview. "If you haven't heard of us before, and then you hear 60 complaints, the antenna would go up. You can't make everyone happy, but we want to try. We work very hard to resolve every complaint as they come in."

BlueHippo's business model is a variation on sub-prime lending, a fast-growth area that serves people with less-than-perfect credit -- for a price.

BlueHippo customers are supposed to pay several hundred dollars into an account with the company before receiving promised computer equipment. Then they continue making monthly payments until the equipment is paid for. But many say they never got their computers or their money back.

The Better Business Bureau of Greater Maryland has documented and closed 23 complaints against BlueHippo since the company was formed in April of last year. An additional 37 complaints remain unresolved, said Tracy Bickel, a spokeswoman for the bureau.

"It's not unusual to receive complaints about a company, but this is a large volume to receive in a short time," Bickel said. "In six months, we have received 60 complaints."

Three things about BlueHippo quickly caught the attention of Nicholas G. Greaves, president of the Maryland bureau for the past eight years: The number of complaints was high for a fledgling business; the type of service was unusual because it was a company-generated layaway plan rather than something initiated by a customer; and the deductions began before a customer signed any paperwork.

In all the complaints the BBB has handled, it knows for sure of only one customer who received a computer, and it arrived significantly later than promised.

"We've already done the most we can do," Greaves said. "We've given BlueHippo an unsatisfactory report. People who go into our database or call us here hopefully are going to back away."

The number of complaints about BlueHippo went from four or five a month between July and November to double that number in December and more than quadruple that number in January, Better Business Bureau officials said.

"There seems to be some reluctance on their part to providing us what we've asked for," Greaves said. "Most businesses, if we bring to their attention that they have a process that is causing problems, they want to change it."

In stacks of complaints to the bureau, consumers complain that they did not authorize BlueHippo to make withdrawals from their bank accounts and that once the withdrawals started, it was hard to get the company to stop. Consumers also complained that they never signed contracts and were unable to acquire a copy of the contract upon request.

The attorney general's office in Baltimore has received 19 complaints about the company in the past year, 15 of which are open, said Rebecca Bowman, an assistant attorney general. Two of them have been mediated and resolved, and another two were filed for informational purposes only.

Bowman's office can bring civil enforcement action against a company if there appears to be a pattern to complaints, she said.

The Better Business Bureau has had limited success in its appeals to BlueHippo for additional explanations of its business practices. A Jan. 6 letter requested, among other information, a list of 200 satisfied customers and their contact information. No such list of contented customers has been provided.

Nor did BlueHippo respond to a reporter's request for a list of happy customers.

Rensin says he is troubled by each of the 60 customer complaints he has received and by the Better Business Bureau's perception that his company is not being responsive.

Rensin said he thinks the local Better Business Bureau office is understaffed, compounding a problem he sees in communicating with it in a timely manner.

"We are distressed about it," he said. "We'd like to have a better relationship with them, but it's only possible if they look at every complaint individually and our response to it. I'd welcome the opportunity to better explain who we are and what we've done to help these customers.

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