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Dell Slapped In NY Fraud Case
David Utter
Staff Writer
2008-05-28
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New York's Attorney General Andrew Cuomo won big against the computer maker, with Dell accused of numerous unsavory business practices regarding its financial and tech support offerings.
 | | Dell Slapped In NY Fraud Case |  |
To put it mildly, Michael Dell should be ashamed. The company bearing his name ended up tarnished as a bait and switch marketer, deceiving customers at every step of a transaction. A New York court found the company guilty of fraud, false advertising, deceptive business practices, and abusive debt collection practices.
Cuomo's office sued Dell in 2007 over business practices by the computer maker and its affiliated financial arm, Dell Financial Services.
"For too long at Dell the promise of customer service was a bait and switch that left thousands of people paying for essentially no service at all," Cuomo said in a statement.
The presiding justice, Joseph Teresi, blasted the company in his decision: "Dell has engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates."
Teresi also criticized Dell for routinely denying even eligible buyers the financial incentives regularly offered by the company. "Dell and DFS frequently failed to clearly inform these consumers that they had not qualified for the promotional terms, leaving many to unwittingly finance their purchase at high interest rates," he said.
Dell's technical support ended up with a laundry list of transgressions regarding their handling of consumer warranties and service contracts, Cuomo's office noted:
According to the decision, Dell deprived consumers of the technical support to which they were entitled under their warranty or service contract by:
• Repeatedly failing to provide timely onsite repair to consumers who purchased service contracts promising "onsite" and expedited service;
• Pressuring consumers, including those who purchased service contracts promising "onsite" repair, to remove the external cover of their computer and remove, reinstall, and manipulate hardware components;
• Discouraging consumers from seeking technical support; those who called Dell's toll free number were subjected to long wait times, repeated transfers, and frequent disconnections; and
• Failing to provide rebates that were promised to consumers. A dollar amount has yet to be set on the customer restitution and state forfeiture of unlawfully earned profits Dell will owe in the wake of the decision. Our only surprise: Fake Steve Jobs has yet to chime in on Dell's bad day.
About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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