Sunday, September 7, 2008

You Deserve It!

Has anyone else heard the radio spots for Blue Hippo? I heard it on early morning radio last weekend and I was shocked! I wish I could find the ad copy somewhere. I did find several articles about how the company takes advantage of poor people, but not the script of the radio ad. It went something like this:

Do you have bad credit? That doesn’t mean you can’t have the laptop you deserve!... You deserve it!... There is no reason you can’t get the technology you deserve, etc. The “technology you deserve” also referred to big screen TVs.

What? Do people really fall for this nonsense? Apparently so. Blue Hippo Funding has been expanding its business since 2003. While you can buy a laptop at a store for about $600, Blue Hippo offers a similar product for the low monthly price of say, $30 a month for 5 years, for a grand total of $1800. Not a good deal by any means, but if you can’t save that much cash and no one else is willing to lend it to you, Blue Hippo can help you get a computer – it’s true.

Their partial pre-pay financing and complaints about undelivered merchandise is the cause of several state class action law suits and a settlement with the Federal Trade Commission. Even with these black marks on the legality of their business, as well as thousands of complaints to the Better Business Bureau, Blue Hippo continues to operate successfully while people continue to complain about their exploitation of the poor and uneducated.

There is a real injustice here. It is not, however, that Blue Hippo is taking advantage of the poor and uneducated through unscrupulous financing practices. People with bad credit are their explicit target customers and fraud is against the law. Blue Hippo’s practices are distasteful, and possibly fraudulent. But the FTC settlement and the class action lawsuits did not shut the company down (I believe the legal findings were “Blue Hippo is icky”). Blue Hippo continues to operate because there are people who still want to use their services.

From the FTC ruling:

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge. [emphasis mine]

So why? Why does a company that promises so much and delivers so little continue to flourish despite questionable legal and moral practices?

Let’s examine what Blue Hippo does: it tells people they deserve things just because they want them, promises to give them what they want without clearly describing how it will be paid for, fails to deliver, makes the initial bad situation worse, but continues to stir up more support among the less savvy and more desperate using new promises of even better entitlements. Does this sound familiar?

It should. It’s been the marketing plan of politicians for years, and instead of being repulsive to people, it continues to attract a lot of us (cue Hillary Clinton’s Christmas present ad – the most flagrant display of promised entitlements I have ever seen).

The real injustice is that the government, the biggest employer of this promised entitlements strategy, through the Federal Trade Commission, is operating as a consumer advocate, en masse, for people who have not only proven themselves unable to cope with their own finances (I tread lightly here myself but do not expect the government to bail me out) but also fall prey to the idea that they deserve what they want. Why is the government so happy to step in and fight their battles? A proper function of our government, to protect individual rights through arbitration of objective laws, is being abused to perpetuate the incorrect notion that people need to be saved from themselves through the force of government!

It’s a just another example of my point that while you can’t mandate the stupid out of people, you certainly can subsidize it. I have previously referred to this situation in Nudged, but will now refer to it as being BlueHippoed – it’s a much more colorful term and is slightly reminiscent of a combination of the political party symbols, with the color leaning a little toward the left, as it should.


Deb said...

Really nice post.

As it happens, I heard a snippet of a Blue Hippo ad on the radio today. It went something like this:

Are creditors calling you constantly and banging down your door? Are you in debt up to your eyeballs?

IT'S NOT YOUR FAULT! Millions of Americans are in the same position as you because of the economy...

LB said...

Thanks for the comment, Deb.

Yes! I think I remember the commercial pushing that "through no fault of yours" button too!

Like I said, Blue Hippo is icky. It's just not as morally repugnant as our government resorting to similar tactics to drum up support.

Manoj Padki said...

Nice post Lynne. I was going to comment along the lines of "What about the children? Don't they deserve the best?" etc., but you have made that point already ;)

- manoj

LB said...

Deserve is not the right word, but yes, children should have the best insofar as their parents have the means and desire to deliver it.

In the case of being a child - it is truly "not your fault".