Judge to Dell: Dude, you're defrauding your customers

[Wondermonkey]

Judge to Dell: Dude, you're defrauding your customers!


The New York State Supreme Court has dealt a blow against Dell by ruling that the company and its affiliate, Dell Financial Services, engaged in fraud, false advertising, deceptive business practices, and abusive debt collection practices.

Justice Joseph Teresi ruled against the companies late last week, saying that Dell repeatedly misled customers and failed to live up to promises. The monetary damages have yet to be determined, but New York Attorney General Andrew Cuomo said that Dell will eventually have to pay back customers. The company will also have to turn over any "unlawfully earned" profits to the state.

"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. "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."

The list of things that Dell did to deceive consumers is fairly long. To start, the company lured in customers by running attractive promotions offering no-interest or no-payment financing options, but then only approved a very small percentage of those who applied (only seven percent, according to the complaint submitted by Cuomo on behalf of New York residents, which is significantly lower than Dell's typical approval rate).

That's not all, though: Dell didn't actually inform those who didn't qualify that they didn't qualify—in fact, the company even congratulated disqualified customers for qualifying—and instead signed them up for much less attractive financing rates behind their backs. "Dell has engaged in prominently advertising the financing promotions in order to attract prospective customers with no intention of actually providing the advertised financing to the great majority of such customers. Such conduct is deceptive and constitutes improper 'bait advertising,'" wrote the judge in his decision (PDF).

Next, Dell apparently engaged in deceptive and false advertising regarding its "next day" tech support service. The company failed to disclose to customers that they needed to disassemble their machines on their own before such service could be provided—much more than any average consumer would be able to do properly.

Customers also complained of long hold times on the phone, frequent transfers to different departments, numerous disconnections, and the need for repeated calls. In many cases, Dell refused to provide service because it had not yet determined which parts needed to be replaced over the phone (due, in part, to customers' inability to properly diagnose their own hardware after taking it apart). Some customers complained that Dell eventually denied them service because their warranties had expired, even though they attempted to make the complaint before the expiration date. Judge Teresi said that customers had sent affidavits saying that it took them weeks, months, and sometimes even years to receive Dell's "next day" service.

The complaints go on. Dell repeatedly refused to honor rebates in cases where customers submitted all of the required paperwork in a timely manner, reflecting an "alarming pattern," according to the court. Dell Financial Services also threatened numerous customers that it would report "late payments" to credit reporting agencies, even after customers had returned equipment to Dell for a refund. Finally, DFS incorrectly billed customers for canceled orders in a number of cases.

"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," concluded Teresi in his decision.

Dell, of course, maintains that it is committed to providing the best possible customer service. The company also disagreed that the findings were as widespread as Cuomo would have us believe. "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 spokesperson Jess Blackburn told CNN.

Abe Linkles

[Snake1399]

i must be in the minority, i've had nothing but positive experiences with Dell. we've got 2 PC's and 2 laptops that are all Dell's. Good customer service and they sent us 2 $100 gift cards last year just to say thanks, tough to beat that these days....

[Ishmael]

I agree with Snake. My and my girlfriend both have Dell notebooks. She uses an older B130 and I bought a new XPS at the beginning of this year. Neither one of us has ever had a problem with our computers, even though mine is practically still brand new. They even comped my girlfriend with a free year of virus protection when hers expired too early.

[Wondermonkey]

Back in the day when I had a Dell, I had pretty good customer service from them, although the last tech I had come out and fix my laptop hinge broke the LCD screen with his screwdriver, so I was out a computer for close to two weeks.

That was the surly techs fault though, and not Dell's. We found out later he also hammered a right side hinge into a left side socket to make it fit, even though it was basically backwards. LOL.

[Quo]

I, too, have had good luck with Dells. I don't pay for their extended service/installation and all that though.

[dmiller68]

My exp with Dell has been a mixed bag most bad. I will avoid them at all costs. If there are way cheaper maybe but from a company perspective I don't know why anyone would do business with them.

[D_Litch]

That guy is a bartender/waiter now. Fall from grace? Upgrade? You be the judge.

[The Milk Man 09]

I really dont like dell that much a lot of their stuff just seems overpriced to me.

[lovekeiiy]

I'm have mixed bag feelings about Dell/Alienware. I think they build solid machines for the most part. No proprietary parts; HP use to do this in the past, not sure if they still do. I have Alienware laptop, desktop, and 20" widescreen LCD monitor.

I had a lot of "fun" with Alienware in getting my computers. Granted I order them during Christmas, and took me about a month to the desktop and around two and half to get the laptop. The desktop ran fine; although it did freeze playing DVDs using MCE. The laptop is a gaming laptop, or as I call it, a desktop in a portable case. It run like a turd, one of the cooling fans on the bottom rubbed the case. I formatted the HDD, and computer has been running well ever since. So, needless to say, they just put a HDD image on the computer that they though would optimize the performance.

The monitor was goofy. Somehow they lost my order. Ironically enough, it was to my benefit because it was on sale when I reorder it, LOL.

One nice thing Alienware did, that is not common anymore, last I saw, was send an actual OS disc. The disc looked like the normal HDD image/recovery disc, but was an OS disc. I really hate HDD image recovery disc because if the system isn't running out the box well, it will have the same problems just like the first time you turned it on; never mind the issues that come from having changed the some of the hardware. Also, windows OS disc can be boot disc; these are appreciated if you have a HDD crash. Recovery disc don't work.

I can't really comment on the the budget systems, since that is not what I order. I order computers to last me five years without having to do any major upgrades; I don't game much on the PC, but I buy gaming PC since they have most up to date hardware with the latest technology. And for that, they're a good price.

[lovekeiiy]

Originally Posted by Wondermonkey

Judge to Dell: Dude, you're defrauding your customers!

...Next, Dell apparently engaged in deceptive and false advertising regarding its "next day" tech support service. The company failed to disclose to customers that they needed to disassemble their machines on their own before such service could be provided—much more than any average consumer would be able to do properly.
...In many cases, Dell refused to provide service because it had not yet determined which parts needed to be replaced over the phone (due, in part, to customers' inability to properly diagnose their own hardware after taking it apart). ... Abe Linkles

This is totally hilarious! I don't know how familiar you are with the general public and computers, but they make the Geek Squad at Best Buy look like computer tech-gurus; I think the Geek Sqaud are a bunch of idiots. How they expect people who can barely operate a computer can diagnose hardware and disassemble or reassemble a computer is beyond me. And most computer customer service call centers just go off scripts, which is frustrating for people like me who 95% have figured out the problem and just want to the warranty part to fix it because you practically have to break both arms to get to the tech who are authorized to send out the parts.

[SHIBUMI]

I've gotta say, ever since I found the Dell Outlet (dell.com/outlet), I've become a HUGE fan.

We've purchased... wow I dunno - 10+ PC's off of the outlet over the past 2 - 3 years. Two for me, one for my wife, her sister, friends up the street, my mom, my sister, the dude that works on my house (2), three for a friend's side biz - there may be more.

You can get a "scratch and dent" with no visible damage - or a "certified refurbished" for hundreds off - same warranty as brand spankin new. And we haven't had a problem with any of them yet.

I used to be a "I'll build it myself" type - mb, cpu, drives, case, pw supply etc - what a pain in the a$$. Now I just troll the Dell outlet for a couple of days and can always find a great system for under $400. "Great" to me is defined as (today) Intel Core2 Duo, 2+GB RAM, 500+GB HD (sata), DVD/RW (2), decent sound and video card (nVidia - but not their top end)

*note: I gave up PC gaming when Xbox Live launched, so not sure how these would fair in that realm, but for every day PC'ing (browsing, e-mail, pr0n lol) and video editing - they've been great!

Saved $1100 off the 'new' price on my XPS by going w/ the outlet!

[Peench]

I've had positive experiences with the Dell's I've bought so far. Sucks that their financial department was so effed up. The unfortunate part of all this is while it helps people in the future, the poor people (no pun intended) who were screwed with high rates, etc. are still screwed I imagine. That's sad.