RSSDell found guilty in New York of misleading, harassing customers
By Scott M. Fulton, III | Published May 27, 2008, 6:13 PM
Dell on Tuesday lost a major judgment in New York, in a case that centered around its financing practices for customers in which it was accused of defrauding and even harassing some.
The case was brought by the state's attorney-general Andrew Cuomo one year ago, and alleged that Dell failed to provide "zero-percent financing" to as much as 85% of the customers to whom that rate was promised, or who were otherwise entitled to such a rate. Dell then failed, the suit alleged, to provide customers with the customer support to which they were clearly entitled.
"Respondent 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," states this afternoon's ruling from Justice Joseph Teresi (PDF available here).
Justice Teresi went on to say certain petitioners were entitled to restitution, though the amount has yet to be determined.
According to a statement from A-G Cuomo's office this afternoon, Justice Teresi apparently agreed with evidence showing that Dell customers were not informed they could qualify for lower interest rates or better terms, and were instead charged as much as 20% interest on their purchases. Those who complained, Teresi found, were subjected to illegal harassment and false billing.
To help make their case, petitioners for the plaintiffs submitted several Dell advertisements. "The ads offer such promotions as free flat panel monitors, additional memory, significant rebates and instant discounts in very large point print in contrasting color," Justice Teresi wrote.
"They also include offers of very attractive financing, such as no interest and no payments for a specified period of time in prominent positions and similar large fonts and colors. While there is fine print below the financing offers limiting them to 'well qualified' customers, and after certain litigation, 'best qualified' customers, nothing in the ads indicate what standards are used to determine whether a customer is well qualified.
"There is also no indication of how many customers are likely actually to qualify," the ruling continues. "Petitioner's submissions indicate that as few as 7% of New York applicants qualified for some promotions. Petitioner has submitted several affidavits from consumers alleging that they saw these ads and were persuaded to call or access Dell's Internet site to shop for a computer because of the financing promotions. However, most applicants, if approved for credit, were offered very high interest rate revolving credit accounts ranging from approximately 16% up to almost 30% interest without the prominently advertised promotional interest deferral."
In his statement this afternoon, Cuomo said, "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. We have won an important victory that will force Dell to live up to its responsibilities and pay back its customers for profits that were pocketed but not deserved. This decision sends an important message that all corporations will be held accountable for the promises they make to consumers."
This evening, Dell spokesperson Jess Blackburn issued this statement to BetaNews on behalf of the company: "We don't agree with this decision and will be defending our position vigorously. Our goal has been, and continues to be, to provide the best customer experience possible. We are confident that when the proceedings are finally completed the court will determine that only a relatively small number of customers have been affected."
Dell
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|A little food for thought.
1. Is it Dell who actually holds the financing on these purchases?
2. Almost every car ad that you see or hear mentions low cost financing and very quickly or in very small print it says "for well qualified customers".
3. It is ILLEGAL to conclude a contract for purchase without disclosing the interest rate at the time of signing and without giving you the option to walk away from the deal.
3a. If Dell was doing this (and it doesn't sound like they were) then they are guilty. But if people were either too lazy or greedy (they had to have the computer) to read what they were signing, then that is NOT Dell's fault.
4. I can understand the rational for trying to buy a computer at 0% interest - since you're not going to get a better deal by telling them you will pay cash - it might behoove you to try and do this. But floating a note on a piece of hardware that obsoletes faster than a new car off of a lot is just plain crazy.
5. Our society has become gluttenous over having to have everything now. Then when things don't go so well, we whine about how "it's not my fault".
If you're not able to read a contract and determine what exactly you are getting yourself into, then you have NO RIGHT to be entering into that contract in the first place. That's not Dell's job, that's your own job to determine. They look at your credit rating and decide whether or not to let you play. If your rate came out higher than the "advertised" rate, then they obviously know something about you that you might not be willing to admit to yourself.
Banks do it everyday on car/home/etc loans. They look at the past history and say - OK, we might be willing to lend them money - but they are not completly dependable - so we'll bump the interest rate to make it worth our while.
Want to avoid all of these headaches? PAY CASH! Put it on your debit card so that it comes straight from your checking account.
Don't have the money in your account, then YOU CANNOT AFFORD TO BUY A COMPUTER!
And don't try to tell me that by purchasing the computer at 0% for a year, you could make more interest on the money than you would pay in interest because we all know that the likelihood of anyone putting that money away for 1yr is less than slim to none.
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|I bought a DELL PC using their 12-month no interest promotion. When I called the customer service to make my last payment including the amount that I neded to pay off by my last due date on my 12th month, I found out that I had to pay financial fees in the amount of $450 since the promotion ended by the beginning of the 12th month and not on my payment due date on the 12th month as advertised by DELL! They applied finance charges on my entire purchase amount although I made all my 11 payments on time and in a higher amount than the required monthly payment amount reducing my last payment amount to almost half of the purchase -price. On their statement, which is prepared after the "promotion end date" there are no financial charges visible, and the payment due is shown as $40 and not the $900 I have to pay off. On top of that the payment dues date was the end of the month as usual and not the 1st of the month! It was very misleading, and prepared in a way to trick the customer and pocket the almost 25% interest on their financing anyway against their advertisement!!!
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|Maybe they just need hire the same people that write the contracts for cell phone companies.. (So it can change when the wind blows.. and the end user can't do anything about it..)
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|case and point.
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|aha!! I knew it! 4 years ago I tried ordering a dell from an email i recieved "zero percent financing"
I called since i have and always had EXELLENT credit... they told me i didnt qualify!!
I was shocked and I knew something was wrong!
762 credit score-
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|The greedy always go the same way don't they? Dell was once mighty, but they, like the rest of the corporate world, are just good at hiding criminal behaviour. Shame on you low lifes. Lies, greed and criminal behaviour. It's the norm, not the exception. I say don't buy their junk and you won't have to deal with their finance department. Imagine the fancy dinners, cars, jets, all that waste on the backs of people who can't even afford to buy one of their fire hazard pieces of junk. Makes you sick. I hope they go to jail. Say hello to Conrad for us.
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|The financing deal/terms sound like they have been pulled from an auto dealer.
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|All company's should be looked at. Not just one. It's big money, that drives this nation. And the little people, get in the way.
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|The sad thing is years ago Dell was known as being a decent computer with the best support. Now like every other company, horrable support for more money. Good customer service isn't around anymore, its all greed. "We're a billion dollar company, lets be a 3 billion dollar company no matter what".
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|"Those who complained, Teresi found, were subjected to illegal harassment and false billing."
a lot of other companies have this same practice
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|"Our goal has been, and continues to be, to provide the best customer experience possible."
Ok. So was it not Dell I talked to whom I could not understand, and was it not Dell who charges 29$ to say "Ctrl + F11"... After warranty expires, for them to tell me what the key combination (does not display on the system screen) to return to factory default, it would cost me an after-warranty fee of 29$. Not so friendly if you ask me.
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|Sounds like Dell has taken a page out of the Intel sales and customer service policy manual.
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|I used to have a Dell credit account. I believe the interest on it was something like 29.93% which is INSANE. As if that wasn't enough, the Dell DJ I had purchased on the account tore up after I finally managed to pay for it. I have since not purchased anything from Dell.
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|Dell is a junk company-never buy from them!!!
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|Bravo Andrew Cuomo! I have excellent credit and was offered a wopping 27% interest rate! Also, the have credit people call you before the bill is due to get a phone payment. They harass!!! Not to mention, the deals Dell advertises--you get a sub par machine. I have switched to MAC
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|"...that only a relatively small number of customers have been affected."
They clearly admitted something happened.
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|taking in more than putting out has the tendency to show gain on the financials, which makes greedy executives, the investors and wall street happy.
the question now is, how much will dell have to put out as the result of the judegment and legal defense.
then there is a bigger question of how many other states are taking similar action against dell.
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|Most likely they'll use their lawyers to tie it up for years to come. In other words business as usual....
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