BlueHippo Funding LLC, a Woodlawn company that sells computers and plasma TVs nationwide to people with poor credit, is under investigation by the Federal Trade Commission after being hit with hundreds of consumer complaints in its three years in business.
In addition to the federal probe, the Illinois attorney general's office sued the Baltimore County company late last year, Florida has begun an investigation and, last week, two Californians sued BlueHippo and are seeking class-action status to represent thousands of consumers.
Launched in April 2003, BlueHippo grew quickly through radio and cable television ads that pitched computers to those without access to traditional credit. Consumers pay through electronic debits to their bank accounts over one year. The company promises to ship merchandise once customers make three months' payments worth hundreds of dollars.
Early on, however, consumers began to complain that they didn't get their computers and weren't able to get refunds, and complaints have persisted.
The Better Business Bureau of Greater Maryland says it has logged 799 complaints in three years, making BlueHippo their most complained-about company. "We get calls every day," said Kerri Kelly, public relations manager with the BBB in Baltimore.
In August, the FTC subpoenaed Wachovia Bank for records relating to BlueHippo, according to a letter from FTC Secretary Donald S. Clark posted on the agency's Web site. BlueHippo, according to the letter, said the records were irrelevant to whether it had violated laws against deceptive mail or telephone ordering, and it tried unsuccessfully to quash the order. As recently as early March, the FTC was collecting evidence from consumers.
FTC officials say they don't comment on whether an investigation is taking place. But Clark, in his letter, stated, "BlueHippo's claim that this investigation is limited to issues related to the `timing of sales and shipments and delivery' ... is simply wrong."
BlueHippo's spokesman, Michael Waldron, would not comment about an investigation but said, "If an appropriate regulatory agency has a question with regard to the company's practices, BlueHippo fully cooperates with them in the interest of clearing up any concerns they may have."
