Tuesday, October 28, 2008

Tennessee says computer seller misled buyers

The Tennessee attorney general's office has filed a 129-page lawsuit against a Baltimore computer sales company, saying BlueHippo violated the state consumer protection act and unlawfully took $2.6 million from at least 4,500 Tennesseans.

The lawsuit says the company, which advertised nationally on TV and the Internet, targeted households with poor credit making less than $25,000 annually to sell them computers through layaway or finance plans, misleading them about when they would receive their computers by mail and then refusing to refund the up-front payments customers had made.

The up-front payment "costs the consumer two and three times more than what suppliers or licensed retailers charge for the same product,'' the lawsuit said.

A time stamp on the lawsuit says it was filed Oct. 23 in Shelby County Chancery Court, although a press release from the attorney general's office said it was filed Monday.

The lawsuit also says BlueHippo doesn't have a license as a lender in Tennessee, as required by law.

FTC settled earlier

The Federal Trade Com mission settled a complaint in February of this year for $5 million with the company, saying many consumers paid hundreds of dollars for computers they never received and that the company failed to disclose its no-refund policy when signing up customers.

"In today's market, our customer base is finding it even more challenging to purchase computers and other consumer electronics through traditional financing," said John Ford, chief operating officer of BlueHippo in a February statement. "This settlement comes at exactly the right time for us and allows us to renew our efforts to provide innovative financing for our customers."

Attorneys with the state of Tennessee were not available late Monday to discuss the lawsuit.

A spokesperson for BlueHippo could not be reached.

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