Computer seller tops at BBB for complaints

CONSUMING INTERESTS

May 25, 2008|By DAN THANH DANG

Phillip White is the newest member of the BlueHippo-Wronged-Me-Club, but his beef with the Woodlawn-based retailer that sells computers and other electronics to people with poor credit is nothing new.

Like so many others before him, White saw a TV ad, called BlueHippo, spoke to a sales rep and then agreed to pay the astronomical price of $2,178.48 for an HP Desktop computer through biweekly electronic debits from his bank account. Like the others, White said he was led to believe he would receive free products and his computer once he established a good payment history.

"I got nothing," said White, a 52-year-old retired printer who lives in the District of Columbia. "By the time they withdrew $500 from my account, I called to ask where my free stuff was and they said I wasn't going to get anything until I paid the full amount. Then they told me I wouldn't get my computer until I paid the total package. That's not what the sales guy told me on the phone. The way they were talking, they made it sound like I'd see stuff in a week or two weeks' time. And now, I can't even get my money back."

The outrage isn't so much that White is left $500 short and empty-handed.

It's that hundreds of others like him have come out of the woodwork even after a class action lawsuit was filed against BlueHippo in California; after several states launched investigations into its sketchy practices; after it agreed to pay millions in federal and state fines to resolve allegations of unfair and deceptive trade practices; and even after it agreed to multistate settlements with the Federal Trade Commission and the Maryland attorney general barring it from misrepresenting sales, credit, delivery, refund and cancellation policies.

You would think with that level of legal scrutiny, complaints like White's would slow to a trickle.

Dream on.

Check out the Better Business Bureau of Greater Maryland's five-year chart of BlueHippo complaints, which maps out the rising number of cases filed. In just the last 17 months, the number of complaints more than doubled - to total 2,757 since 2004. That steady outpouring of consumer frustration has made BlueHippo the BBB's most complained-about company.

Of that number, 2,177 complaints were closed by the BBB -- 16 closed due to a prolonged delay in reaching resolution; 43 answered but not resolved; 10 answered with a company offer for resolution but rejected by the consumer; and over 800 closed with no response at all from the company.

Search online and you'll see an abundance of BlueHippo complaints on various Web sites, many of them landing within the past 12 months since the company settled with Maryland and the FTC.

Or flip through the growing stack of complainants who have signed on to the class action lawsuit filed against Blue Hippo in California, says Washington, D.C., attorney David Marshall, who is leading the charge.

"We have not had any slow down since the various AG offices and FTC have filed [or] settled," said Angie Barnett, president and chief executive of the local BBB.

I called BlueHippo about White's complaint, but no one called me back. I left three voice mails to request comment about this column and never received a response.

Regulators tell me it's difficult to shut down a business completely. Some businesses tweak their policies at a bare minimum necessary to comply with enforcement action. Some businesses change their names or open affiliated businesses to escape enforcement. Some just move their operations to another state. BlueHippo operates under BlueHippo Funding or BlueHippo Capital LLC with operations in Maryland and Virginia. The company once opened BlueHippo Capital in Las Vegas, too.

"Some companies are able to continue because they haven't done whatever it is in such a widespread manner that would force a court to bar them from doing it again," FTC spokesman Frank Dorman said about problem companies. "The only way we'll know if they're in compliance is if people continue to file complaints with us. We'll investigate and if they're violating the law, we will go after them again."

Steven Silverman, director of the Maryland attorney general's Consumer Protection Division, echoed those issues.

"It's frustrating for all of us," Silverman said. "Courts are reluctant to shut businesses down unless their bad practices are widespread and perpetual. The remedy isn't necessarily to put them out of business. It's to get them to comply with the law and the settlement agreement.

"They claim that they are abiding by the agreement," Silverman said of BlueHippo. "We'll end up having to look at each and every complaint to see if they crossed the line."

Meanwhile, BlueHippo is free to continue coaxing vulnerable people like White to sign up.

But hey, it's not all bad.

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