Tycko & Zavareei and Halunen Law File Class Action Against Bluestem Brands for Fraudulent Sales Practices, Hidden Finance Charges and Usury

August 27th, 2015

Minneapolis (Aug. 26, 2015) – Customers of online retailer Fingerhut.com filed a class action lawsuit today in the District of Minnesota, alleging that the company’s huge mark-ups on electronics, household goods and other products are actually finance charges in disguise.

Fingerhut.com targets low-income consumers with damaged credit to sell them extremely high-cost electronics and household goods, the complaint alleges. Items sold on Fingerhut to low-income consumers come with substantial markups. For example, Fingerhut currently sells an iPad Mini 3 for $539.99, although its retail price is $399. According to the complaint, this massive sales price markup is actually a finance charge in disguise—violating the Truth in Lending Act, state consumer protection statutes and state usury laws.

Bluestem Brands’ 2014 U.S. sales exceeded $900 million. California has one of the highest percentages of Bluestem sales in the country and most of those sales were by Fingerhut.

Almost all purchases on Fingerhut.com are made on credit arranged by its parent company, Bluestem Brands, says the complaint. Virtually all purchases come from consumers Bluestem targets as having a low income and a low FICO credit score. Identical goods sell for far less on Gettington.com, a Bluestem website targeting higher income consumers.

Plaintiff Jessica Parm seeks to represent all individuals who had similar experiences on Fingerhut.com.

Melissa Wolchansky, an attorney at Halunen Law, says, “Consumers deserve to know what finance charges Fingerhut is applying to their purchases. When companies are honest and up front about interest charges, consumers can make informed decisions.”

Jeffrey Kaliel, a partner with Tycko & Zavareei, says, “Bluestem charges higher prices to consumers with low incomes or damaged credit, but offers the same products to those with better credit and higher incomes for much less.  If Fingerhut is going to charge huge amounts of interest on low-income consumers, it should not disguise that fact behind big price mark-ups.”

Tycko & Zavareei and Halunen Law represent Parm, and urge consumers who made purchases on Fingerhut.com to learn more about their legal rights.  For additional inquiries, please contact Wolchansky,  612-605-4098, or Kaliel, 212-973-0900.

Case: Civil No. 0:15-cv-03437, United States District Court, District of Minnesota

About Halunen Law

Halunen Law has expertise in litigating consumer class actions and has a track record of success in challenging dishonest marketing, corporate fraud and illegal business practices. Halunen also offers experienced representation to employees and whistleblowers under the False Claims Act and other statutes. Visit the firm’s website at www.halunenlaw.com.

About Tycko & Zavareei

Tycko & Zavareei LLP, based in Washington, D.C., has a long and successful record of litigating complex cases. The firm routinely handles large and complex matters throughout the country, advocating on behalf of individuals fighting for their civil rights, consumers seeking redress for unfair business practices, whistleblowers exposing fraud and corruption, and non-profit entities and businesses facing difficult litigation.

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