BlueHippo's troubles spreading

John O'Brien Aug. 10, 2007, 2:44pm


TALLAHASSEE, Fla. - BlueHippo Funding showed in West Virginia that it won't kneel before that state's Attorney General. Friday, it found out it might have another fight on its hands.

That's because Florida Attorney General Bill McCollum issued a consumer advisory warning his state's residents that BlueHippo may practice potentially deceptive advertising tactics when it sells computers.

West Virginia Attorney General Darrell McGraw made similar allegations when he sued the Maryland-based company in March. McGraw seeks an injunction, stopping BlueHippo from doing business in West Virginia. McGraw also seeks a $200,000 bond from the company and $5,000 for each violation of the West Virginia Telemarketing Act. The suit later was removed to federal court and recently remanded to Kanawha Circuit Court.

In the suit, McGraw's office said consumers claim to have paid for computer equipment they never received, or did receive but that did not work. Also, some consumers paid prices much higher than they would have paid at a store. A news release from McGraw states one consumer paid about $1,800 for a computer similar to one she bought at a national retail store for $400.

BlueHippo hired the firm Steptoe Johnson to represent it and filed a 73-page answer to McGraw's allegations, then hit McGraw and Revenue Secretary James Robert Alsop with a countersuit in June.

BlueHippo says its national advertising - on television, on the Internet and in print - is "protected commercial speech" under the First Amendment.

It also stresses that BlueHippo does not make the first move with consumers.

"BlueHippo did not and does not initiate calls to consumers - including West Virginia consumers, the complaint says. "Rather, all West Virginia consumers with whom BlueHippo has attempted to enter or has entered into a transaction initiated the telephone contact to BlueHippo."

McCollum says his office has received more than 50 complaints from Floridians, and the Council of Better Business Bureaus has released a similar consumer warning that says it has received more than 1,400 complaints nationwide in the past three years.

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