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.
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You mean like the "exotic financial instruments" crap excreted from Wall Street?
Re:Why bother? (Score:5, Funny)
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.
Class Action Laywers and Scammers? (Score:5, Insightful)
Do you have any good examples?
Re:Class Action Laywers and Scammers? (Score:4, Informative)
Milli Vanilli: they settled a class action lawsuit.
A more recent example is the class action lawsuit brought against auto dealerships for refusing to disclose hidden points the added to financing charges. "Those few percentage points of interest that dealers add on for themselves - without telling the customer - is called "dealer reserve," and it can add thousands of dollars to the cost of buying a car." http://www.cbsnews.com/stories/2004/04/01/60minutes/main609870.shtml [cbsnews.com]
Excluding scams from operating businesses seems to me an inaccurate distinction -- an operating business can be a scam. Just look at magnetic arthritis bracelets, or The Secret.
My favorite is Excel Communications -- a wildly successful business that managed to beat Microsoft to become the youngest operating billion-dollar-annual company in history. Their MLM scheme was practically indistinguishable from any gifting club pyramid scheme. http://en.wikipedia.org/wiki/Excel_Communications [wikipedia.org]
I do not know of any class action lawsuits against them, but believe there were a number of actions brought against them by state consumer agencies.
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We are talking about scams , not legit businesses. Scammers are not afraid of lawyers because they offload the money to accounts not related to the business, instantly. You can't recover what isn't there. If you think this is outlandish you are ignorant to how many legit businesses use the same offloading model to protect their separate business units. They offload everything that they can so that if a lawsuit occurs they can cut losses and start over.
Strictly speaking your examples are talking about du
Re:Class Action Laywers and Scammers? (Score:5, Informative)
Those aren't "facts", those are semantic games to carefully redefine terms in unusual ways so your original claim is true by definition, creating a nice, tight circular argument that means nothing.
Re:Class Action Laywers and Scammers? (Score:4, Insightful)
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That's pretty difficult to do without first winning a criminal case. I've experience of one such case - an outfit called "Starving Students Movers" which passed ex-cons off as "bonded" employees, and when the poor customer's stuff was stolen or just broken through negligence, the company paid for damages at a flat rate per pound of weight divided by t
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In the end, the consumers will not get all of their money back, even if the company is sued into oblivion. What will happen is lawyers will get the largest share, with a small sum going back to the actual consumers.
Maybe not even in cash.
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Only on DSlasdot (I wish) could blaming the victim of a scam be modded up.
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
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Because if anyone of your customers or competitors is a bigger fat cat than you, the FTC will get you? ^^
I mean its not as if they got away with it...
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If the money is gone, somebody got away with it.
Shocking! (Score:5, Interesting)
I remember watching their commercials and going to their website to check it out. The fine print clearly stated that you will not receive their computer printer/combo/etc. until after you mail off the last payment!
I thought to myself, who in their right mind would even consider giving this company a dime, but apparently there were 35,000 such individuals.
The lesson here folks: if it's too good to be true then it probably is.
Re:Shocking! (Score:5, Funny)
The fine print clearly stated
Oxymoron
Re:Shocking! (Score:5, Interesting)
That's what user mode in Opera is for. It makes any hidden text or fine print clearly visible in a normal font. I am sure there is a Firefox addon or setting that does something similar, but it is very hard if not impossible to make fine print stay hard to read with any decent web browser.
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Control + Mouse Wheel.
Or Control + + if you don't have a mouse wheel.
Or View -> Zoom -> Zoom In if both options are inaccessible.
Re:Shocking! (Score:5, Insightful)
just make the fine print a jpeg file with low quality or embed in flash
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Re:Shocking! (Score:5, Funny)
This is the first time that the Nyquist sampling theorem has had an application to legal bullshit, I think. Wow.
Re:Shocking! (Score:5, Informative)
Er, is this a serious post? You do realize that the link leads to a thumbnail, don't you?
Remove the -thumb [consumerist.com] part of the URL, and you get something more readable [consumerist.com]. Still a pretty lousy scan, but perfectly legible.
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After finding it though, what do you do?
I usually run that stuff through EULAlyzer [javacoolsoftware.com]. It doesn't catch everything, but it does spot a lot of dangerous words.
And it even formats the info with 1-10 bar graphs, so if you get a lot of 7's (like eBay's TOS), then you know it's bad.
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An excellent suggestion for those who are already using Opera (an excellent browser, don't get me wrong. I adore Opera on my Blackberry and Wii.), but not someth
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They were so massively overpriced... I wonder how many of the 35,000 actually sent in all the payments?
Also, if they were shutdown... I wonder why their site, http: //www. bluehippo .com/default.asp
still works...
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their site, http: //www. bluehippo .com/default.asp still works...
To replace goatse.
--
Financial advice 60% off.
Re:Shocking! (Score:4, Funny)
The fine print clearly stated that you will not receive their computer printer/combo/etc. until after you mail off the last payment!
So it's like social security?
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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.
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It really is sad. They probably could have kept 3/4 of the money they got if they just shipped out computers. And they'd be legal and everything.
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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.
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?
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Re:I'm fairly surprised, actually... (Score:5, Insightful)
Yes. Bernard Madoff being a fantastic example of this.
Re:I'm fairly surprised, actually... (Score:5, Interesting)
Actually, Madoff never expected to make it as long as he did. He was surprised it took them so long to catch him.
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In other words, you believe that Madoff intended to spend the rest of his life in prison?
Are you really that stupid?
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Re:I'm fairly surprised, actually... (Score:4, Informative)
http://www.telegraph.co.uk/finance/financetopics/bernard-madoff/5928899/Bernard-Madoff-surprised-fraud-was-not-uncovered-sooner.html
Read here motherfucker.
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"Nobody here but us chickens" said the fox in the hen house.
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It's not that unreasonable, is it?
I'd be happy to believe that he started fairly sensibly, and then started with little frauds and fiddles as they became necessary, to hide poor performance and boost results. His investment business did have a core business model at one point- it's what enabled him to hide his scam from his sons and colleagues so long.
Once your result-faking and number-fiddling has reached sufficiently large proportions, and your business has become nothing but a Ponzi, there's no real way
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He didn't have a crystal ball. Spirits didn't visit him in the night and map out the future for him.
I think you need to consider two points in time - before he started, and when he'd got in so deep there was no turning back. Maybe a third - where he started fiddling a bit but thought he'd be able, Micawber like, to somehow cover it.
Sometimes events take on a life of their own.
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I think you need to consider two points in time - before he started, and when he'd got in so deep there was no turning back.
Madoff could have cut and run and moved to Barbados to suck down rum drinks for the rest of his life at basically any point. There's no such thing as "no turning back" unless you jump off a cliff with no hang-glider, bungee cord or similar.
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.
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No it isn't rational to expect you get away with it, it is just how scammers work. Part of it is many of them actually talk themselves in to believing that everything they do is ok. They aren't entirely rational, in that they are the kind of person who can't feel empathy for anyone else. Thus if it enriches them, they see it as ok.
Also greed can override the few functioning brain cells many people have. So they get greedy and try to take more and more, even though there's no real reason to and in doing so t
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:Instead of referring to just "Blue Hippo" (Score:5, Informative)
Re:Instead of referring to just "Blue Hippo" (Score:5, Informative)
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So why is the FTC throwing lawyers at BlueHippo instead of arresting Rensin?
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Well apparently BlueHippo was held in contempt by federal court in April.. and this isn't the first time they've been in trouble
The FTC isn't a police agency (Score:2)
They can make regulatory rules in their area of authority, and they have the ability to bring people to civil court for failure to comply but that's all. They aren't a police agency they don't have anyone with arrest powers.
An arrest would have to come from someone like the FBI, or the state's police agency. However for that, there'd need to be a criminal charge brought by a government prosecutor.
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Just like with Madoff. I wonder, WTF was the "exit strategy"? Since the FTC has shut them down. I assume more than 1 person sent that final payment. It's a house of cards. When you build it. Don't you think about getting out before it collapses?
Winning gold at the scam olympics (Score:3, Informative)
I just went there and clicked a purchase button that said I needed to log in, but my SSN would do just fine to log in.
This is a pretty great scam.
Re:Winning gold at the scam olympics (Score:5, Informative)
https://www.bluehippo.com/csv2/Login.aspx [bluehippo.com]
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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:Winning gold at the scam olympics (Score:5, Funny)
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So they have your SSN for the user name. Just think of what they could do if they knew your mother's maiden name! Oh never mind, that's the password! https://www.bluehippo.com/csv2/Login.aspx [bluehippo.com]
Don't worry if you're having trouble logging in, you can also use your bank account number [bluehippo.com].
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Wow.
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if they shipped only one PC (Score:2, Funny)
How did they get 35,000 people to agree over the choice of a Windows desktop theme?
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.
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.
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.
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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?
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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:5, Informative)
The elderly are doing the same thing to workers right now through Social Security and Medicare.
We're promised future product (retirement money and health care) if we make payments up front. And it's unlikely the state will be able to deliver since they've already spent the money.
Sound familiar?
Better them than me (Score:3, Interesting)
No, but it's them or us.
They didn't do that in good faith. They knew it was a scam and cannot possibly work, just as well as we know now.
Why not blame the previous generation? The generation after us sure will.
If we don't end it now, then
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.
No one can protect... (Score:4, Insightful)
...the Sucker.
Somewhere, P. T. Barnum is laughing at you.
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.
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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.
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"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 which standard shall we use? "Survival of the fittest" or "the golden rule"?
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The golden rule works very well, but it only works on a voluntary basis.
See http://godsvaluesystem.com/ [godsvaluesystem.com] for a discussion of "sacrificial love for the benefit of others" as a value system.
There is actually a free book on relationships from that perspective that even a non-religious person would find helpful at http://blackstripespublishing.com/ [blackstrip...ishing.com]
Re:Immoral people (Score:5, Interesting)
Your statement reminded me of this quote.
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And the next thing he probably said was:
"Thank goodness we have a right and propery Theocracy here to control how people live in the Nation of Deseret...I mean the State of Utah."
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 eter
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.
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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.
Go Try to log in... (Score:5, Informative)
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Username: 457-55-5462 [wikipedia.org]
Password: Davis
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Yeah, well, a cursory Google search didn't turn it up, and I'm only willing to go so far for a joke an hour before bedtime.
Re:Go Try to log in... (Score:5, Informative)
Social Security Number/Home Phone
BlueHippo Account Number/Home Phone
Social Security Number/House Number
Bank Account Number/Zip Code (!)
Social Security Number/Password (Mothers Maiden Name?)
Didn't receive anything in return? (Score:2)
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.
Well, they received a lot of advertising, didn't they?
Even their logo was stolen (Score:3, Funny)
The pitchman (Score:3, Funny)
Yeah, but who here cringed every single time he said the word labtop instead of laptop?
Their phone number still works (Score:5, Informative)
I just called it and got through to someone calling themselves Danny Archer. They did not provide a company name in their greetings instead asking immediately for my first name.
If they're shut down they need to be shut down.
Should've answered with... (Score:2, Funny)
They did not provide a company name in their greetings instead asking immediately for my first name.
Should've told him your first name was "Detective" to see how he reacted.
Apparently, Peter Potomus was running this scam... (Score:2)
...even while he was working for Sebben & Sebben.
And he even had the utter gall to appear AS the corporate symbol, too.
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Failed step 3 (Score:2)
1. Scam idiots
2. Collect millions
3. Flee the country with your millions. Looks like China is about the only livable country without an extradition treaty to the US. Hong Kong sounds very nice.
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Except it's actually "scam the poor".
Re:Hey Libtards (Score:4, Insightful)