BlueHippo Funding, LLC, the popular computer supplier for consumers with less-than-perfect credit has been again brought into a lawsuit alleged violation of the Deceptive Practices Act, this time in the state of Texas. BlueHippo commercials run nationally and target consumer with poor credit. They claim to offer low cost monthly payments to essentially lay away a top of the line computer system. Many times the company offers free products included with the purchases.

The concept is BlueHippo is simple: consumer who can’t get financing elsewhere for computer technology agree to make weekly or monthly payments toward the purchase of a computer, usually through automated payments directly from their bank account. Consumers were required to make a number of payments before receiving their computers and then financing the rest of the balance. The computers are typically priced much higher than comparable computers at other retail outlets but are touted as a way for those with bad credit to still purchase the latest technology.

However, after many consumers had faithfully made their payments, BlueHippo failed to deliver anything. Those consumers that were lucky enough to actually receive the products they financed often received outdated software or machines. Other consumer complaints included continued the inability to contact customer service representatives at the company. BlueHippo is also accused of failing to disclose consequences of the layaway plan until after consumers signed the agreement. These consequences were often severe, including default payments. When many consumers stopped paying their monthly payments due to the inability to speak with the company directly, BlueHippo claimed consumers defaulted on their contract. The consequence of that default allowed BlueHippo to increase interest rates by 24%, or the highest interest rate allowed by law.  Other consumers have filed complaints alleging that Blue Hippo advertised a variety of free products but also failed to deliver them to consumers. These ‘extras’ included printers, televisions, video gaming systems, and computer software.

BlueHippo is now in bankruptcy. The most recent lawsuit in Texas contends that BlueHippo was never registered in the state to conduct business. The state alleges that BlueHippo also targeted Texans with poor credit and limited financial resources to get a computer elsewhere with a promise of guaranteed financing approval for the layaway plan. The Texas Attorney General is now working with the Chapter 7 trustee to help recovery costs for consumer restitution as well as asking for civil penalties of up to $20,000 per each violation of Texas Deceptive Trade Practices Act.