BlueHippo Scam Collected $15M, Only Shipped One PC 216
An anonymous reader writes "Turns out that those BlueHippo commercials advertising financing for computers and other electronics for anybody, regardless of credit, were way more sleazy than you thought. The FTC is bringing this fraud down, but not too soon. 'According to the FTC, the company's brazen business model continued without interruption after the 2008 settlement. "In fact, in the year following entry of this Court's Stipulated Final Judgment and Order for a Permanent Injunction, BlueHippo financed — at most — a single computer to the over 35,000 consumers who placed orders for computers that could be financed during the period,' the FTC told a court (PDF) yesterday. In the meantime, the company took in a cool $15 million in payments from consumers, who don't appear to have received anything in return.'"
Why bother? (Score:5, Insightful)
Why bother running a successful business with a plan when you can run a fake business and get the hell out of Dodge when it starts coming down around you? The customers, of course, will want their money back, but will probably get a 15% off your next purchase coupon, good until yesterday, while the lawyers will get a few million to settle.
I'm fairly surprised, actually... (Score:5, Insightful)
Had they actually shipped a few thousand bottom-of-range refurb Compaqs or whatever, which are pretty damn cheap by the pallet load, they never would have attracted fire from the FTC. The way that their "business" was structured(at least back when I checked their website when I first heard about them), they should have been able to clear fairly impressive margins on the backs of the poor and clueless even without cheating. And, if they had avoided legally actionable fraud, they presumably would still be operating today.
Why would somebody do that? Is enforcement so weak that getting away with it is a rational expectation?
Instead of referring to just "Blue Hippo" (Score:5, Insightful)
How many would invest with Bernie Madoff if he somehow miraculously got out of prison - regardless of the name of his company?
Re:I'd do it! (Score:3, Insightful)
Re:I'm fairly surprised, actually... (Score:5, Insightful)
Yes. Bernard Madoff being a fantastic example of this.
Is this the free market? (Score:4, Insightful)
But how can it be perfect if the we cannot protect those who need protection most from those who would steal their money. If $1 gets spent by ACORN in a questionable manner, an act of congress is immediately enacted,but when those not so well off are robbed, we can't even make the criminal parties stop, much less put them in jail.
Or look at Verizon. They are stealing from their customers in $1.99 increments. And don't tell me it is not stealing. If you went to store and got charged for everything you put in your shopping cart before you checked out and left the store, and the store refused to refund you money if you did not actually want the merchandise, I am sure the cops would be called.
Of course Billg loves the free market. If a contractor installs unlicensed versions of MS Office on a clients computer, that contractor can earn a million dollars bounty forreporting the company, and then the BSA has every right to put the company out of business with exorbitant and irrational penalties. But if MS steals software, they can just blame it on a contractor and then apologize.
People are decrying the direction of the US, but I think after the past several years of pretty constant theft of tax dollars and personal property by the elite, a change was and is necessary.
Immoral people (Score:5, Insightful)
You can never make enough laws to keep people like this from exploiting others.
It would never occur to those of us who have been raised with an inkling of an idea of good and evil to treat others in such a despicable manner.
It has nothing to do with free market. It is an issue of ethics and values.
Without the adoption of some standard of right and good within the individual heart, there is no hope of restraining people from similar scams.
so frustrating (Score:5, Insightful)
I'm not doing great financially, but those of us in the know are pretty good about staying on the connected side of the digital divide.
Not only that, but we are the same folks that keep old parts around and every now and then are able to build a workable setup for someone that could really use a computer. People that are thrilled to have something, even if it comes with a CRT monitor and has a 7 year old video card.
I've 'volunteered' hours working on crappy emachines for people because I know they can't go out and buy something fast and great.
F you BlueHippo. I know these people personally, and a computer means a lot to them.
Re:Winning gold at the scam olympics (Score:3, Insightful)
Normally, I would be horrified. But in this case I'd like to congratulate them on taking Darwinism to a new level. They not only took those saps for a wad for an over priced computer that they would rarely have had to deliver, they also got they keys to the kingdom in the form of ssan and mothers maiden name!
Re:Shocking! (Score:5, Insightful)
just make the fine print a jpeg file with low quality or embed in flash
Re:Is this the free market? (Score:4, Insightful)
Are you trying to say that what has happened recently isn't theft by the elite? If you are you seriously need to wake up. Instead of Verizon taking from their customers with little scams and contract foolery we now have big brother telling us that it doesn't matter if we like it or not; he's going to take from you regardless of position.
We've effectively gone from a system that we could opt out of (for the most part) into one where the government forces you to give it up till you bleed. Tell me how much better things are again?
Your problem with the free market is that you don't seem to know the difference between a luxury and a necessity. If you don't like Verizon's business practices boycott them. No one was twisting your arm. Now you have no choice.
What law would you pass to stop a lawbreaker? (Score:4, Insightful)
But how can it be perfect if the we cannot protect those who need protection most from those who would steal their money.
The free market is not perfect.
But how on earth would you stop someone like this in an un-free market? Remember they are quite willing from the outset to break any law. If all the laws you pass men nothing to them, how have you helped except make it harder for honest people to run a business, who then quit leaving more room open for scams?
Re:Why bother? (Score:5, Insightful)
Your post was going well, but I do not know why you decided to blame the lawyers in the end. Class action lawyers are usually the only people these scammers are afraid of. Government agencies are slow and it is rather rare that they actually go out of their way to chase scams. It is great that the FTC decided to go after those bluehippo people, but this is a very rare occurrence.
Usually when companies try to do something dodgy towards ordinary consumers they are mostly worried about the class action lawyers. Because there are lawyers out there that do nothing but look out for scams so that they can get their payday. Sure it usually ends up that the lawyers get a lot of the money and the scammed customers get a small check in the mail. But even if the lawyers get all the money they still take alot of money from the scammers and thus punish them, and that is actually a benefit to society.
Re:Shocking! (Score:0, Insightful)
Re:Is this the free market? (Score:4, Insightful)
I don't have any idea why you think the free market is going to protect the weak and stupid. The entire concept of the free market is to fleece the weak and stupid. Welcome to reality.
Re:I'm fairly surprised, actually... (Score:4, Insightful)
Yes they may have been able to clear good margins if they had an efficient operation. But of course companies like that are rarely efficient, because a thief usually does not know how to do anything well other than stealing.
Also, outfits like these are usually high pressure sales operations which means they have to pay their salespeople a lot of money per sale.
But in any event, I suspect they were planning on shipping the computers some time but they just did not get around to it because they were too lazy, and having too much fun making money to actually spend any money on computers.
No one can protect... (Score:4, Insightful)
...the Sucker.
Somewhere, P. T. Barnum is laughing at you.
Re:Why bother? (Score:2, Insightful)
Only on DSlasdot (I wish) could blaming the victim of a scam be modded up.
Class Action Laywers and Scammers? (Score:5, Insightful)
Do you have any good examples?
Re:Is this the free market? (Score:5, Insightful)
We've effectively gone from a system that we could opt out of (for the most part) into one where the government forces you to give it up till you bleed. Tell me how much better things are again?
I see your point, but the idea you're missing is that much of technology moves from a luxury to a necessity very quickly. Ten years ago you could compete in the job market with no computer skills, and that's no longer the case. Shorter patent lifespans would allow companies to profit from good research, but not set back an entire society to profit a single corporation. Imagine if GE came out with a solar panel that was dirt cheap to manufacture, but charged 400 times more than it cost to make. China, India, and Russia could reverse engineer the product, and then we'd be competing with international companies that pay far less for electricity.
Furthermore, you have zero input on the actions of corporations who provide these necessary luxuries, like oil, electricity, information infrastructure, and so on. At some point, you have to assign a third party with more power to keep them in check, or we'll all be living in company towns, shopping at company stores, which isn't a hell of a lot better than soviet communism.
and so what? (Score:3, Insightful)
your criticism is only valid if complete enforcement was ever a goal anyone ever considered practical
law enforcement is just a maintenance function of civilization:
1. it never ends
2. it can never possibly be done to completion
and the realization of either truth isn't discouraging or disenheartening. it's just the way it is
people with a moral compass and people who will screw little old ladies out of their hard earned cash are both reborn in every generation anew, in a sort of statistical stasis. its an eternal state, and we must continually pursue and punish wrongdoers, forever, job permanently incomplete
Re:Hey Libtards (Score:4, Insightful)
Re:I'm fairly surprised, actually... (Score:1, Insightful)
But why would anyone believe something that:
1. Makes absolutely no sense.
2. Said by Madoff?
Also (Score:4, Insightful)
It isn't worthless. Enforcing the law, imperfect though it may be, does help and serves two major functions against people with no morals:
1) It deters some of them. While the sociopathic types that just don't care for others can never be made to care, they are generally extremely self interested. Well, something that often works then is threats. "If you do this, we will punish you." They don't want to be punished so they don't do it.
2) It gets rid of some of them. Lock a criminal up, they can't go and commit their crimes. For those that won't be deterred, you simply remove their ability to cause problems.
So while not perfect, it is worthwhile. It is also really the only thing you can do. There is no way to have a perfect moral code that prevents crime. Reason is even if you had such a code, and if everyone were taught it all their life, you'd get the scoiopaths who just don't care. They really don't have morals like most people. They can't empathize with others so all they care about is themselves. Morals won't work for them.
Anything involving humans as they are now will not be perfect. That doesn't mean we shouldn't do the best we can.
Re:What law would you pass to stop a lawbreaker? (Score:3, Insightful)
I bet that passing laws would be a lot more effective if they were actually enforced.
Give the FTC and the FBI some teeth and let them bite these assholes HARD.
If a law is worth passing, then it's worth enforcing.
Might be kinda hard though with all that regulatory capture getting the watchdogs cozily in bed with the bad guys.
Re:Is this the free market? (Score:4, Insightful)
But how can it be perfect if the we cannot protect those who need protection most from those who would steal their money.
As PT Barnum once said, "the fool and his money are soon parted". This notion that the government has to step in and protect people from themselves is completely misguided; it treats everyone like grown up children who cannot take responsibility for their own choices. Do you want to live in the real world and be treated like an adult? If your answer is yes, you have to be willing to let people make their own decisions, no matter how stupid, and own their failures. That is what it means to be an independent adult.
If $1 gets spent by ACORN in a questionable manner, an act of congress is immediately enacted,but when those not so well off are robbed, we can't even make the criminal parties stop, much less put them in jail.
Personally, I was glad to see ACORN go. They were a criminal gang of election fraudsters and two-bit street hustlers who were out of their league and got what was coming to them. Did they honestly believe that they wouldn't be infiltrated and exposed? Their operational security was a joke and they paid the price. Good riddance.
Comeuppance. (Score:5, Insightful)
People have god-given frailties, which scammers EXPLOIT by victimizing people's blind spots or weak points. Your post blaming the target of BlueHippo fraud was insensitive and cloddish. But you will mature over the next few years, and become more aware that humans who are *average* or even *below average* still deserve our respect. You, too, have your blind spots and two Achilles heels.
Wendy / the Darwin Awards
Re:I'm fairly surprised, actually... (Score:2, Insightful)
"Nobody here but us chickens" said the fox in the hen house.
Re:Shocking! (Score:3, Insightful)
I seem to remember my grandpa mentioning things like that. He also told me that in the old days if something broke you'd fix it.
He was full of crazy notions like that.
Re:Shocking! (Score:5, Insightful)
So it's like social security?
Not completely. Social Security provides an important benefit right now: It greatly reduces the risk that your mother-in-law will be moving in with you.
Re:Comeuppance. (Score:3, Insightful)
maybe not (Score:2, Insightful)
I bet the full ramifications aren't public yet (and never will be, on purpose).
I am thinking there was a lot of money laundering going on with all those "investors". Some were legit and stupid, thinking their boy had the magic touch and could consistently beat the market for huge percentages, but it couldn't have been all of them. There are probably cons mixed with cons mixed with even further cons and crimes inside that story and it goes way beyond Madoff. Regulators were aware of him, lower level ones were told to sit down and shutup and we are supposed to swallow their fairy tale bilge "they couldn't find anything" for years and years, despite numerous attempts. I just slap ain't believing that. I don't believe there was an "intelligence failure" with iraq and WMD, some other events as well, including madoff's currency transfer and evaporation service.
The old adage of "follow the money" still works, in his case, you have to start with him in the *middle* and look and follow BOTH ways, not just use him for a starting point and look upstream only. That's what they WANT you to think, but I don't believe their official story that the crimes all started exactly with him, I'm just too naturally skeptical now from watching government and big business over the years. My default is "they are always corrupt until proven otherwise" on any big money or big power subject. The *best* you will ever get out of them publicly is a rough surface level/convenient facade view of reality. I just do not believe in the "few bad apples" in the barrel excuse they always use. It's a default rotten apple barrel, with a few good apples who get shafted by their corrupt superiors.
And because those are the market cops who allowed this to go on and on and on and on, I have to therefore assume there was (and still remains) massive crossover corruption at the highest levels.
Re:Class Action Laywers and Scammers? (Score:4, Insightful)
Re:Devils advocate (Score:2, Insightful)
The frailties in question here could have been plugged by their parents in one line: "If it looks too good to be true..."
Well that is some sage advice there, but I remember seeing the commercials and nothing about struck me as being too good to be true. In fact, they didn't provide a whole lot of details so I just figured they were selling $300 computers for $1500 and financing them at 30% interest. That's a money making business plan, and for some reason perfectly legal in the US.
I also remember seeing an commerical for a product (probably a weight-loss pill or something) that made a sounds-too-good-to-be-true claim then backed it up with "If it wasn't true, we couldn't say it on TV!" I shook my head so hard it rattled, but it must be plausible to someone.