Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC obtains $13.4M contempt judgment in deceptive financing suit, (May 2, 2016)

By Greg Hammond, J.D.

The federal district court in New York City has imposed more than $13.4 million in compensatory contempt sanctions against BlueHippo Funding, LLC for violating a stipulated final judgment and injunction order that prohibited BlueHippo from making a number of representations concerning its electronics financing services (FTC v. BlueHippo Funding, LLC, Dkt. 08 Civ. 1819 (PAC), File No. 052 3092).

The FTC filed a contempt charge against BlueHippo in 2009, claiming that BlueHippo falsely advertised that it finances computers; failed to ship computers within specified time frames; failed to disclose material information about the terms of its Store Credit Policy; and conditioned its extension of credit on mandatory preauthorized transfers, in violation of a stipulated final judgment and order of permanent injunction. The district court originally granted the FTC approximately $600,000 in damages, but the U.S. Court of Appeals in New York City vacated the lower court’s decision, remanding the case for the district court to consider presumption of consumer reliance factors and calculation of contempt damages.

On remand, the district court found that 55,892 consumers paid BlueHippo $14,062,627.51 in connection with orders for computers, but received no merchandise. Using the $14,062,627.51 as the appropriate compensatory baseline, the court subtracted $662,000 to offset refunds paid directly by BlueHippo to consumers and to account for amounts paid to settle related state court actions. Finding no remaining disputes of material fact to be tried, the court entered judgment in the amount of $13,400,627.60 as the amount necessary to fully redress the harm suffered by the consumers injured by BlueHippo’s scheme.

Companies: BlueHippo Funding, LLC

News: ConsumerProtection FederalTradeCommissionNews NewYorkNews