Fraud ruling against Dell validates years of gripes
In December of 2002, I started a page on my Computer Gripes site devoted to Dell.
Accumulating gripes about Dell was like taking candy from a baby; there was no sport in it. Eventually, I gave up maintaining the page, but despite a total lack of advertising or promotion, people kept finding the page and adding their own gripes.
Now these Dell gripes are official.
The Office of New York State Attorney General Andrew Cuomo won a lawsuit on Tuesday against Dell and affiliate company Dell Financial Services (DFS). The illegal activity involved both computers and finance. According to a government statement, "Dell and DFS engaged in fraud, false advertising, deceptive business practices, and abusive debt collection practices." Wow.
The Associated Press reports that the attorney general's office had 700 complaints when the lawsuit was filed and has received more than 1,000 since. And that's just in New York.
"For too long at Dell," Cuomo was quoted as saying, "the promise of customer service was a bait and switch that left thousands of people paying for essentially no service at all."
State Supreme Court Justice Joseph C. Teresi, who made the ruling, said, "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."
On the computer side, the decision says (the bullet points below are taken directly from the official statement) that customers were deprived of warranty tech support by Dell:
- Repeatedly failing to provide timely on-site repair to consumers who purchased service contracts promising "on-site" and expedited service;
- Pressuring consumers, including those who purchased service contracts promising "on-site" 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.
On the financial side, Justice Teresi concluded that "Dell lured consumers to purchase its products with advertisements that offered attractive "no interest" and/or "no payment" financing promotions. In practice, however, the vast majority of consumers, even those with very good credit scores, were denied these deals. In a classic 'bait and switch' scheme, DFS instead offered consumers financing at high interest rates, which often exceeded 20 percent. 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."
The response from Dell, besides disagreeing with the ruling, was that not many people complained. The same AP story quotes a Dell representative, who says, "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," and it reports earlier statements by Dell that the company "had 6 million transactions in New York between 2003 and 2006, with alleged complaints representing only a tiny fraction."
To help draw your own conclusion, read the original decision and order (PDF).
See a summary of all my Defensive Computing postings.
Michael Horowitz is an independent computer consultant and the author of several classes on Defensive Computing. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure. 
One occasion was my initial purchase of a laptop for myself. The first time I received my laptop, my screen was horribly defective with constant flickering; my optical drive made a screeching noise whenever accessing a disc; and my GPU was defective, as proven in numerous benchmarks and observations (and all of these problems were confirmed by the on-site tech and Dell themselves), not to mention my battery being a part of the defective batteries at the time and they kept putting off my call with them for an entire year to get a replacement (the website rejected my number, and the representatives throughout the year kept hanging up or not following up with me)--later my hard drive turned out to be defective as well (confirmed by Dell and the on-site tech). During all of this, every single time I had a talk with customer service, they kept telling me about a policy that sounded like it was no-lemon, where if my computer had (3) times where it needed to be repaired like this (the screen and hard drive incidents are seperate), then I'd be given a new laptop of equivalent value. Sounded great right? Well on the second repair, the representative told me that no such thing can happen, when the first had told me so (I had a badge number at the time, but I'd have to dig up records). Turns out now, my 2nd year of having this laptop, that the screen is going through some problems like the first screen.
Second occasion: This happened on all (3) transactions for laptops I did for customers. Unfortunately , I only have a complete record of (1) transaction, as I'll explain now. Every single time I purchased a laptop, at the end of the shopping screen, I'd be told a fee, and when I got my confirmation email seconds later, the fee changed by several cents. No big deal. Well, when the laptops finally shipped, and I checked my online banking, the fee changed by a dollar and then some. Luckily, for the last transaction, I had a copy of the email stating an already higher price, and my bank statement and my digital checkbook showing a different charge all together. One dollar isn't a lot, but think about how many transactions they could have been doing this to, per day--that's a lot of extra money they're taking in.
Anyways, I'd like to get in on the action against Dell--I have documentation for both (well I think for the first problem, I have documentation).
I'll follow up on this.
Over the last couple of months, I have learned a lot about Dell Computer Corporation. Numerous questions pass through my mind when I think of the scum bags I have dealt with, here are just a few. What company creates policies for people to lie to you? Dell. What company employs people who will provide you with false names and get very angry when you find out their real contact information? Dell. What company will sell you a bogus warranty? Dell.
Dell's employees will tell you that they are committed to customer satisfaction. Of all the things you will ever hear from a Dell employee, the forgoing statement is their biggest prevarication of them all. Dell could care less about their customers, with the exception of their large corporate accounts. They will lie to you; they will cheat you and then laugh right in your face.
I have some suggestions for anyone who has a Dell computer still under warranty. First, file a small claims action in your local court. It will cost you under a hundred dollars to file. You do not need an attorney and other than the filing fee, you have nothing to lose but your time. It will cost Dell the cost of transportation and lodging for the poor sap that has to show up, hopefully in front of a judge that Dell screwed over. Even if some poor sap does show up and miraculously wins the case, the satisfaction of screwing over Dell is worth the money. And if they don't show up, you automatically win.
Second, and this is definitely a favorite of mine. Contact your bank and or credit card company and file a deceptive trade dispute on the total charge or charges you paid Dell for your computer and warranty. The credit card company and or bank will automatically credit your account for the charge(s). Dell will have to prove to the bank that they did not cheat you, which they cannot do. If your honest, send back your computer to Dell, if not, send them a brick. Just make sure you have proof by tracking information that you sent something back to them. Dell has to prove what, if anything, they received. With the morons they hire, you have nothing to worry about.
Third, I encourage everyone who reads this to publicly post the names, email addresses and phone numbers of the Dell scumbags that continue to laugh in our faces.
- by r.silverwing January 25, 2009 6:29 PM PST
- I agree with all those who have posted already, and cannot say anything much more succintly than has already been stated.
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(11 Comments)I will say, however, that Dell is certainly a leader in scam practices. Early 2007, I took out a loan with Dell Financial Services for a $1600 Inspirion laptop. I had formerly been more or less satisfied with Dell's customer service, but cannot say I am any longer.
As of today's date, I have paid over $1800 for the system and yet, according to Dell, I still owe $1900, and then some. Due to being a college student, as well as suffering some unemployment for an extended period of time, I can't afford to keep paying Dell. On three separate occassions, I contacted Dell about my situation. I inquired about returning the laptop, trading my current one in for a cheaper model, and working with me to lower the 30% interest rate. In all instances, I was told no, Dell cannot do that. Dell cannot work with you to do any of these things.
Dell's business practices are ridiculous and driven by greed and apathy for their consumers. I would not advise, under any circumstances, doing any business with Dell if it can be helped.