Attorney General Andrew M. Cuomo announced that his office has filed a lawsuit in Albany County Supreme Court, against Dell and its affiliate Dell Financial Services (DFS). The lawsuit alleges Dell and DFS engaged in bait and switch advertising with respect to their financing practices, failing to provide customers with adequate customer service, and conducting deceptive business practices with their technical support services, promotional financing, rebate offers, and billing/collection activities. Cuomo said in a press release by his office that, “At Dell, customer service means no service at all.” Cuomo is seeking restitution to consumers, paying civil penalties, and adopting measures to prevent using deceptive and fraudulent practices in the future. Cuomo is out to send a message to other companies that this conduct is illegal and will not be tolerated.
Consumers can visit a special web site to file a complaint related to any of the charges against Dell and/or DFS. The web site is www.NYAGDell.com. You can also call the Attorney General’s Consumer Help Line at (800) 771-7755. The specific charges filed in the lawsuit include:
1. Dell deprived consumers of technical support that was entitled under their warranty or service contract.
2. Dell repeatedly failed to provide timely onsite repair to consumers who purchased the expedited service.
3. Dell pressured consumers into removing the external cover of the computer and remove, reinstall, and manipulate hardware components.
4. Dell discouraged consumers from getting technical support since their toll free line was often disconnected, provided long waits, and numerous transfers.
5. Dell used defective refurbished parts or computers to replace consumer’s equipment.
6. Dell lured consumers to purchase with a “no interest” or “no payment” financing; 85% never received these terms; some with good credit got a 20% rate.
7. Dell incorrectly billed consumers on canceled orders, returned merchandise, or accounts they did not authorize.
8. Dell continually harassed consumers during their collection process.
9. Dell did not resolve errors in billing in a timely manner, resulting in consumers receiving bad credit reports.
10. Dell intentionally misled consumers and required payment for those practices.
Cuomo’s office has received around 700 complaints and rising, which he describes as an unprecedented amount of consumer complaints. A couple of the actual consumer complaints revealed on the complaint web page include:
58-year-old Paul Reisner, a computer programmer from Westchester County, had a stellar credit history when a Dell sales associate “baited” him to apply for Dell’s preferred no interest and no payment financing offer. When Dell’s sales associate assured him he had qualified for “Dell’s Preferred Account,” Mr. Reisner made his $1500 purchase. Two months later, Mr. Reisner discovered he had been switched to a regular plan with DFS, Dell’s affiliate, at an interest rate of 29%. Mr. Reisner says his regular credit card would have charged no more than 8%.
When 67-year-old Barbara Williams, President of the Crochet Sewing Guild, bought a Dell computer, she also purchased 3 years “on site service.” When Ms. Williams’ computer crashed, she called Dell’s technical support. Ms. Williams says Dell simply abandoned her for 2 months before agreeing to send a technician to her home.
In a report by Associated Press on May 17, Dell officials denied the charges brought against them in the lawsuit. Dell spokesman Bob Pearson claims their practices will be found to be “fair and appropriate.” According to Bob Kaufman from Dell, their consumer complaints for both Dell and DFS have dropped between 2005 and 2006. Kaufman adds that the 700 complaints does not represent the company’s six million transactions between 2003 and 2006 just in New York State alone.
In recent months, Michael Dell has returned to the company as CEO and hopes to lead the company in planning for better customer service, as well as planning a more aggressive sales strategy against its fierce competitors. Several top executives have left Dell, including CEO Kevin Rollins and CFO Jim Schneider.
