BlueHippo gets contempt charge from FTC

The Federal Trade Commission today asked a federal court to issue a contempt order against BlueHippo for violating a 2008 agreement that required the company to pay $3.5 million for consumer redress and barred the defendants from further deceiving customers.

The FTC’s contempt motion alleges that between April and December of 2008, more than 35,000 customers contracted for BlueHippo’s computer financing deal. But the company provided, at most, a single financed computer, failing to provide financed computers even for 2,477 customers who managed to meet the companies’ conditions. Complaints about the company poured into the Better Business Bureau. On top of all that, BlueHippo failed to submit a report to the FTC showing how it was complying with the settlement, as required by the order.

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According to the FTC, the computer financing firm has continued to deceive, collecting more than $15 million from consumers based on claims that it would finance their purchases of new computers, but delivered neither the financing nor the financed computers, the FTC said.

The FTC alleged that less than one percent of consumers who signed up with BlueHippo received the financed computers they applied for, and undisclosed conditions to redeem "store credits" were rigged to discourage consumers from using them.

In a contempt motion lodged with the court today, the FTC charged that BlueHippo has flouted a settlement reached with the agency last year, continuing to deceive thousands of financially strapped consumers with phony promises that it would help them purchase a computer even if they have credit problems. The FTC also is asking the court to order BlueHippo to compensate injured consumers and bar BlueHippo from similar conduct in the future.

“Years of broken promises by BlueHippo have left consumers seeing red,” said FTC Chairman Jon Leibowitz.