After a federal judge issues a permanent injunction, the FTC will begin identifying consumers eligible for compensation through company databases and will mail claim forms to them, Gorman said.
Specifically, the FTC alleged that by failing to ship merchandise in a reasonable time frame or denying consumers the right to cancel and get a refund, BlueHippo violated the FTC's mail-order rule. Officials said the company also might have violated the federal Truth in Lending Act and its regulations by not giving consumers written disclosures before the transactions were made.
The commission also alleged that the company violated the Electronic Fund Transfer Act and its regulations by offering credit on the condition of repayment by preauthorized debits.
The FTC settlement bars the company from misrepresentations in the marketing of consumer equipment requiring more than four periodic payments. In addition, the company must fully disclose terms of refunds, cancellations or exchanges.
The FTC's action does not address one issue that drew criticism at Maryland's settlement last spring and elsewhere - the high cost of the computers. The company charged several times the retail price for the equipment, according to other settlements.
Founded in 2004, BlueHippo now describes a policy on its Web site that gives customers a cash refund within seven days of signing up and store credit for canceled purchases that can be redeemed by purchasing products on bluehippo.com.
BlueHippo topped the list of 25 companies that were the subject of the most complaints to the Better Business Bureau of Greater Maryland last year, said Angie Barnett, president and CEO of the organization.
liz.kay@baltsun.com
The settlement
What happened:
BlueHippo has agreed to pay consumers between $3.5 million and $5 million to settle a Federal Trade Commission complaint that the Woodlawn-based computer retailer took consumers' money without providing the electronics they paid for.
Consumers will receive a claim form from the FTC if they:
Entered into a contract with BlueHippo before March 2006,
Paid money to the company,
Did not receive the products they ordered or a full refund, either from BlueHippo or in other restitution.
Questions:
Call the FTC's consumer response center at 877-382-4357. The federal agency will handle refunds.
For information from Blue- Hippo:
Consumers can e-mail FTCsettlement@BlueHippo.com
