BlueHippo Consumer Fraud Charges Brought by Texas Attorney General

BlueHippo promised computers, preying on Texans with poor credit history, but didn't deliver. The company is already in Chapter 7 bankruptcy. Now, Texas Attorney General Greg Abbott has charged BlueHippo with violating the state's Deceptive Practices Act.

Consumer Affairs, which has been receiving complaints about Blue Hippo for years, reports that "according to customer complaints received by the Texas Office of the Attorney General, the company failed to ship computers as they were contractually obligated to do, even though customers made the required number of consecutive layaway payments. Complaints also indicate the defendants failed to ship, as promised, certain "free" products, such as printers, software and televisions."

In November of 2009, the Federal Trade Commission (FTC) charged BlueHippo with contempt. Per the FTC's Memorandum in Support of its Motion for Order to Show Cause Why Contempt BlueHippo and Joseph Rensin Should Not Be Held in Contempt for Violating the Final Judgment and Order of Permanent Injunction, "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."

This followed a 2008 settlement agreement with the FTC, wherein BlueHippo agreed to pay $5M to consumers who filed complaints about the company's scam.

Texas is only one of several states to bring consumer fraud charges against Blue Hippo. Others include:

In May of 2007, Maryland's Attorney General settled with BlueHippo for $1M for defrauding consumers.

In April of 2007, West Virginia's Attorney General sued on the basis that BlueHippo did not conform to their state's telemarketing laws.

In December of 2006, Florida's Attorney General filed suit against Blue Hippo for failure disclose the actual cost of their products.

In November of 2005, the Illinois Attorney General filed a lawsuit over Blue Hippo's deceptive marketing and sales tactics.

BlueHippo class action lawsuits have been filed in several states throughout the years.

BlueHippo filed for Chapter 11 bankruptcy in November of 2009. The FTC tops the company's "creditor list" with an amount that could eventually surpass $20 million due to ongoing litigation. The Chapter 11 was converted to a Chapter 7 (liquidation) bankruptcy in December.