Attorney general's office goes after the swindlers

In 2009, 37 companies were sued over rip-offs in Ohio

Monday, January 25, 2010 3:05 AM
By James Nash

THE COLUMBUS DISPATCH

Johne Nichols, a 73-year-old retiree who lives in the Linden area, is used to garden-variety rip-offs such as paste that's supposed to cover up paint scratches but doesn't and wrinkle cream that doesn't perform as advertised.

But when she paid a company called BlueHippo nearly $1,600 for a computer that never materialized, Nichols said she couldn't swallow her pride and write off another apparent petty swindle.

So she did what more than 30,000 other Ohioans did last year: She called the state attorney general's office to report the presumed scam.

Nearly a year after calling the state, Nichols -- like hundreds of other BlueHippo customers in Ohio -- still hasn't gotten her money back. She does, however, have the satisfaction of knowing that Attorney General Richard Cordray is suing the company over the alleged multi-state scheme.

Last year saw consumer complaints rise to new highs in Ohio. Cordray's office said it fielded 30,259 complaints, up 20 percent from 2008. The Better Business Bureau of Central Ohio also reported an increase in the number of consumer complaints.

Both offices say bottom-feeders have proliferated as economic woes take a toll on companies and consumers.

"It's both the economy and folks being more aggressive in terms of marketing their products," said Susan Choe, the attorney general's top consumer enforcer. "With companies experiencing financial difficulties, they're failing to deliver the product."

According to Cordray's lawsuit, BlueHippo was more than a victim of a bad economy. The Baltimore-based company swindled hundreds of Ohioans with bad credit by signing them up for layaway plans to receive computers that never came, the lawsuit said. Cordray's office said it received 80 complaints last year on BlueHippo.

One of those complaints came from Nichols, who said she wanted to buy a computer to access the Bible and other religious materials.

"The Scripture told me that there are deceivers out there, and I was deceived so quickly," she said. "When I see someone on my street doing this, I call the police."

BlueHippo is in Chapter 7 bankruptcy proceedings. Company officials did not return calls for comment. The company's last listed bankruptcy attorney and Ohio-based defense attorney said they no longer represent the company.

Officials in Cordray's office acknowledge that, with thousands of claims against BlueHippo nationally, Ohio victims might see little to no restitution.

BlueHippo is one of 37 companies that Cordray's office sued last year as a result of consumer complaints. Of the more than 30,000 complaints received, the majority went to an informal resolution process that yielded $2.8 million in refunds to consumers, Choe said.

The office opened about 200 formal investigations, she said.

The top categories of complaints: motorized vehicles, including repairs and title services; collections, credit reporting and financial services; and household goods and property improvement.

The largest increase came in the area of debt collection, where complaints have risen from 1,699 in 2006 to 3,250 in 2009. That's both a function of the bad economy -- more people owing money -- and more aggressive tactics on the part of collectors, Choe said.

Typical of the car complaints was the case of Syed Aman of Groveport, whose 1992 Honda Accord spent a month in a repair shop after a botched repair attempt early last year. After contacting the attorney general's office, Aman got the repair shop to pay $400 toward the cost of his rental car.