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Published:July 17th, 2007 04:38 EST
Greedy, Greedy Hippos

Greedy, Greedy Hippos

By S Renee Greene

BlueHippo Funding, LLC (BlueHippo), a financial services company offering computers, electronics and other merchandise via a hybrid layaway and installment financing plan, aims its arrow at low-income consumers and those with poor credit ratings. A while back, I wrote two articles on how low-income consumers are worth billions and how some agencies target certain people who cannot get traditional credit and financing, holding them hostage to perpetual debt just because they make an effort to “keep up” with the rest of the world. See “Low Income Population Worth Billions”* and “Help! I’m in Debt and I Can’t Get Out!”** The old adage still rings true. If it sounds too good to be true, it probably is.

I watched the BlueHippo commercials on television and shook my head in disgust. “Here we go again,” I said. But why mess with a system that works, particularly with people whose credit ratings are already messed up because they typically don’t have disposable income or cash on hand? Combine that rat trap with the fact that they will fall even further behind in progress if they can’t at least keep up with the basic technology, and you have emerging companies like BlueHippo who promise not to “hassle” them about credit— for a price; and a very steep price, at that.

Prime prospects appear to be families with about $25,000 per year in annual income. Before any merchandise is shipped, BlueHippo requires customers to establish a record of nine consistent payments. These payments are usually in the form of an initial deposit followed by weekly payments– all of which are debited directly from consumers’ checking accounts.

The Better Business Bureau has logged more than 1,400 complaints from all 50 states against BlueHippo in the past three years. Due to this pattern of complaints and BlueHippo’s failure to correct the underlying causes for the complaints, the company is rated ‘unsatisfactory’ by the BBB System. “More than 65 percent of the complaints against BlueHippo fall into one of three categories: High pressure sales practices, non-delivery of promised merchandise, and unwillingness to provide a refund or exchange,” said Steve Cox, Vice President of Communications for the CBBB. “Basically, consumers tell us they are being sold on a product and payment plan, [and] aren’t getting what they’ve paid for in a timely manner, and [that they] have no way to get their money back.”

As with just about all buy-here-pay-here deals, rent-to-own furniture or electronic merchandise, or payday loan scams, the consumer generally pays three to four times more than the retail cost of high-end products for very low-end models. Though BlueHippo notes that consumers may cancel at any time within the initial nine-week deposit payment period, company policy does not allow for refunds. It gives customers, instead, “credit” similar to in-store credit for returns to purchase only products available on the company’s Web site. If a customer initiates a return and uses the store credit, chances are more than likely that they will not receive the merchandise they attempted to exchange.

The BBB of Maryland reports that a woman paid BlueHippo $2,200 for what she claims was a $600 computer. Through electronic debits from her checking account, she paid an initial fee of $99 and then $41.98 per week to establish a credit history; however, it is not known whether or not BlueHippo actually reports “positive credit” to the three major agencies, Equifax, TransUnion and TRW n/k/a Experian. The woman’s computer was delivered four months later and only after numerous calls to the company. And the free 20” plasma television and printer promised by BlueHippo after she made her final payment? The items never surfaced.

Cox states that while BlueHippo has attempted to address complaints, and has delivered some merchandise, overall the company does not meet BBB standards for marketplace behavior and is not measuring up in terms of consumer trust. Blue Hippo denies the allegations, but settled their cases and now no longer sells to residents of the state of Maryland.

From predatory lending in the housing market to the financing of cars, furniture, appliances, or short term payday advance loans for those who fall upon “hard times,” those among us who have the least resources have always been enticed by the lure of what appears to be easy answers in a complicated capitalistic society. It’s a double-sided coin that begs one question: Is it okay for a business to take unfair economic advantage of persons who can’t get what they want or need any other way? Maybe caveat emptor doesn’t apply to those whose only option is to do without; or, as in the case of BlueHippo, to pay for something before they’ve seen it.

For more information, or to file a complaint against BlueHippo, go to; or, contact your state attorney general or the Federal Trade Commission.

* Low Income Population Worth Billions,

**Help! I’m in Debt and I Can’t Get Out!

Also by S. Renee Green, I’ll Pay Later, [ed.]