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Product costs Their main product is a low-end Gateway-built personal computer system for which they charge a total of $2178.48 including interest, subject to late fees. Radio commercials run during August 2006 state that a customer must build a "short credit history" to qualify. The payment is made through a long installment plan. Initially, customers pay a $99 down payment, followed by 13 weekly payments of $39.99. This is followed by 3 to 12 variable payments. Customers then make a final pre-shipping payment, followed by a week-long waiting period, before the system is physically shipped. Post-shipment, customers must do 52 more weekly payments (1 year - see chart below). Comparable computer systems generally cost $400 out-of-the-box.• BlueHippo states that $700 worth of software is included with the computer;• however most of the included software is trialware, freeware, and old versions of free software such as OpenOffice 1.1.2, and software typically• included at no cost in systems in this system's price range. BlueHippo recently changed its business practices to include a refund policy. Under the new policy, customers may elect to receive a full refund of monies paid during the layaway period, after paying a $175 early termination fee. The fee is disclosed and agreed to by customers at the time of their order. In order to be eligible for a refund, customers must cancel their purchase contract prior to the computer being ordered.• Website problems For at least 6 months, their website claimed to implement SSL security for online payments while no such security was actually in place. Customers ordering online must submit complete bank checking account information, employment information, income, their home phone number, and Social Security number, and submission of this type of information over insecure lines is a particularly dangerous invitation to internet fraud and identity theft. The website also appears to lack the ability to view financing terms such as annual percentage rate and finance charges. If true, this would be a violation of federal regulations. Truth in Lending Act | ||||||||||
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