Judge: "Dell Has Engaged In Repeated Misleading, Deceptive And Unlawful Business Conduct"

A state judge in Albany, NY has found that 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.”

In addition, the judge also found that Dell Financial Services “has engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions, fraudulent, misleading and deceptive practices in credit financing and improper debt collection practices.”

NY’s Attorney General, Andrew Cuomo, sued Dell and Dell Financial Services for depriving consumers of the technical support they were entitled to under their warranty or service contract by:

  • repeatedly failing to provide consumers who purchased service contracts promising “onsite” and expedited service with timely onsite repair;

  • for pressuring consumers, including those who purchased service contracts promising “next day 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;

  • for using defective “refurbished” parts or computers to repair or replace consumers’ equipment.

The lawsuit also accused Dell’s financing operation of luring customers into high interest rate financing deals by using a “bait-and-switch” tactic. Dell advertised “no interest” or “no payment” financing, but according to the lawsuit, “the vast majority of consumers, even those with very good credit scores, were denied these deals. “

In addition, the lawsuit also alleged that Dell incorrectly billed customers on canceled orders, returned merchandise or on accounts that were fraudulently opened. The AG’s office says that “Although many consumers repeatedly contacted Dell and/or DFS to advise them of the errors, DFS did not suspend its collection activity and Dell failed to expeditiously credit consumers’ accounts, even after assuring consumers it would do so. As a result, many consumers have been subjected to harassing collection calls for months on end and have had their credit ratings harmed.”

For more information about how this lawsuit affects Dell customers in New York state, please click here. According to the Wall Street Journal, Dell has no comment at this time.

Decision and Order in NY vs Dell (PDF)[NY AG]

PREVIOUSLY: Help New York Sue Dell By Filling This Complaint Trough
NY Sues Dell For So-Called “Award-Winning Service”

Comments

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  1. Noiddog says:

    I hope that all of the execs at dell die in a fiery plane crash. Oh what a day that would be….

  2. PHX602 says:

    If Spitzer were still the AG, all Dell would have to do is get a couple high-priced hookers to solve the problem.

  3. 4ster says:

    If I were the CEO of Dell, I’d sell the company and give the money back to the shareholders.

  4. Graverobber says:

    Work for Dell, burn in hell!

  5. diablodevil2 says:

    Dude, you’re going to jail o.o

    If only, yes?

  6. CaesarBach says:

    Wow, how the mighty have fallen.

  7. bleh says:

    I used to work in Dell tech support. I worked for an independant firm that contracted with Dell. I was surrounded by idiots that went through a couple of weeks of training, had no special computer knowledge and no support from supervisors. At the time Dell was moving back from India and some product lines were still being handled by techs on the subcontinent. If I needed to ship a part, I had call India to get approval. Cases were almost never followed up on. The most common solution was to reformat using the special recovery partition. I was ashamed to work there and glad that I never have to look back. I support New York in their efforts.

  8. kspray--dad says:

    Personally have had nothing but good luck with Dell computers and sales so thankfully have never had to deal with a service issue.

    Though their service seems to ‘suck’…do they have a more than industry standard component failure rate?

  9. spinachdip says:

    @4ster: +1

    Too bad Michael Dell didn’t do that back when they maxed out at $50 a share. They’ve been stuck in the low-20s for all of 2008.

  10. Zanorfes says:

    Dell is probably going to take this “very seriously” and then forget about it and put the court on hold for years.

  11. EricaKane says:

    Wow. This judge must be a consumerist reader, he ripped Dell to shreds. Holy moly, justice does prevail!

  12. coffee177 says:

    Like we always say in the field:
    “Oh Hell, Its a Dell”

  13. Dell got ripped badly this time. I wonder how much lower the stock can sink. Perhaps they’ll fix their practices this time? Or will more outsourcing take place to cut the expenses down?

  14. JulesWinnfield says:

    New York consumers are lucky to have Andrew Cuomo as their Attorney General.

  15. Blackneto says:

    @kspray–dad: I’m with you.
    I’ve been in “the business” for almost 25 years supporting mostly small businesses and the medical field.
    Dell, HP, Gateway, Compaq, doesn’t matter who, they are going to go through periods of suck.
    In the past 5 years i’ve had the best success with Dell.
    Prior to that it was Compaq, pre merger.

    I don’t know if Dell has a failure rate higher than anyone else. But this financing story is interesting. Personally I haven’t had any problem with them. But I usually only deal with their business line and support. I have a $17,000 line of credit with them, enough to outfit a small office if a customer requires it. But I’ve rarely carried a balance with it for more than 3 months.

    one bone of contention with me is their laptop replacement policy.
    I know in the past they have, at their discretion, replaced instead of repaired a laptop. Usually with a refurb that was of questionable quality.

    On the plus side, Dell will probably pour a lot of money into “Taking this Seriously” and service on the consumer end will improve.

  16. Jeepman says:

    @noiddog — Yes, very rational, we don’t like their business practices so let’s wish them all a horrible, flaming death. Seems reasonable to me. Hope your family is very proud of you for such a wonderful approach to life. You asshole.

  17. parad0x360 says:

    I was a victim of deals warranty and financing dept’s, they deserve far worse.

  18. parad0x360 says:

    i meant Dells not deals

  19. khiltd says:

    @pjcurry:

    Let’s all take the internet seriously.

  20. quirkyrachel says:

    Whew! Yes! Finally. Though I still say that if you purchase through their business services department, you get *way* better service. Not that that makes the actions described above ok.

  21. joellevand says:

    I still remember when Dell was a good company with reps who would bend over backwards for the customer.

    Sadly, that was in 1999, which is also the last time I bought a Dell.

  22. SuffolkHouse says:

    I JUST YESTERDAY got screwed by Dell. My wife and I bought a lap top that we would have paid outright for, but were enticed into financing by a 0% interest for 6 months offer. Two months later, they retroactively charged me interest for the first months financing – which DIDN’T show up on the first bill – suggesting we had 0% interest.

    I did the EECB, and got some idiot’s call back that told me that I agreed to their terms when I accepted the interest rate.

    I explained that the acceptance of the rate didn’t suggest that I didn’t get the 0% rate for a limited time. She told me we didn’t qualify.

    My wife didn’t qualify! She has an 810 credit score.

    FUCK DELL

  23. kspray--dad says:

    @SuffolkHouse: As all of Dell’s sales calls are recorded AFAIK, did you not just refer to your sales reference number on the EECB. Ask to listen to it yourself.

  24. kspray--dad says:

    @khiltd: Perhaps pjcurry has had a family member suffer a horrible, flaming death?

  25. eelmonger says:

    I’ve always had success with Dell for home use, but maybe that’s because I’ve never had to deal with home support as I’ve never encountered a problem with a home system that I couldn’t resolve and their computers generally seem well built. The only Dell I’ve ever had fail on me was in our lab and support was pretty straight forward: I figured out a stick of RAM had gone bad, the tech support guy had me verifying which stick it was with a Dell RAM tester, and then a new stick was sent overnighted to us.

  26. Lambasted says:

    While I haven’t had any major problems with Dell, clearly many others have. I am glad a company is being held accountable for their actions. About damn time. Now if the Attorney General could add Comcast to the, “I’m Gonna Get You Sucka” list, I’d really be a happy camper.

    It’s funny how it is always the Attorney General from New York who figures out that the best way to ingratiate yourself to many voters is to champion their rights and fight big business who have stomped on them. No doubt Cuomo’s political aspirations are behind his zeal but good for him. At least he is not like most who talk a good game just to get elected but then sit on their ass and do nothing. (Hello, Pelosi. Don’t get too comfortable sitting in that big chair of yours on the Hill.)

  27. graymulligan says:

    Cuomo’s actually been quoted a couple times on Comcast. Comcast is huge, and almost competitionless in parts of NY, here’s hoping he’ll throw some of that same attitude their way.

    Dell. hehe.

  28. Lambasted says:

    @graymulligan: Comcast is the Al Capone of our day. They think they are so untouchable that they openly admit to their shenanigans without concern that anyone can do anything to stop them. Arrogant bastards.

    Andrew “Elliot Ness” Cuomo would be a national hero if he took on Comcast. Fight the good fight for the people, Cuomo!!

  29. silencedotcom says:

    Really? Nobody’s thrown in the obligatory “get a Mac” comment yet? I’m almost disappointed, Consumerist.

    We use Dells at work. They turn on and run. That’s all they need to do. Never used them at home, but I’ve got their catalogs for 3 years for some reason.

  30. sleepydumbdude says:

    Damn I wish i lived in new york. I was a victim of the Dell’s Preferred Account offer. I was going to buy a cheap 6-700 dollar PC and the guy talked me up to a higher priced one. They approved me for 2000 with 12 months same as cash and no financing for a year. So since I just started college I bought pretty much everything I needed for class and a good PC. 1800 then got 60 days no interest and a 24% interest rate. Call and complain and couldn’t get anybody who spoke decent english. Transfered like 4 times and hung up on once.
    Luckily my parents paid it off immediately and I just paid them back with my next two grant checks that were going to go towards paying it off anyways.

  31. Televiper says:

    @4ster: The CEO goes before the Board and represents the company. The Board represents the shareholders. The shareholders, own the company. Of course that is probably a very simplistic way of putting it.

  32. bohemian says:

    I swore I would never buy a dell after we helped a friend troubleshoot theirs. On the cheaper models the power supply and motherboard were both proprietary. The power leads that go to the motherboard were different than wiring for an off the shelf power supply. The jacks on the motherboard were nothing like the ends on an off the shelf power supply.

    I looked to see how much either part (the likely problem) was both through Dell and various other places online. $360 for either one, this was a $500 PC. That was when I swore I would never touch a Dell, ever. What a scam.

  33. spinachdip says:

    @Televiper: It’s a reference to a statement Michael Dell made back in 1997. The exact quote was “What would I do? I’d shut it down and give the money back to the shareholders.”
    [news.cnet.com]

  34. dragonfire81 says:

    Just watch Dell weasel out of this one as it drags through endless appeals.

  35. ZacMoney says:

    All I can say is thank god for the BBB. I dealt with regional managers, corporate execs, even the vp of sales in ca with no results on my Promotional Financing. One call to the BBB and DFS changed their story gave me my $ back and wiped my remaining DFS balance to a $0.00. I will never purchase a Dell product again, they are the armpit of the computer manufacters. “Wipes ass with apology letter from Dell & flushes it down”

  36. ZacMoney says:

    @joellevand: Dell still gets people to bend over, only now its the customer!

  37. bradanomics says:

    I was on the receiving end of having to do work when I had paid for the on-site support. It bothered me that Dell was not living up to the expectations, but it did not bother me so much as to do anything about it. I am pretty technical so I just did it myself.

  38. JulesWinnfield says:

    @Lambasted:Cuomo only has the power to go after companies that are violating NY laws against NY citizens. For example, look what he’s done against the big banks’ student loan abuses that affect NY residents. I don’t know if Comcast is a big player in NY (unlike TimeWarner or CaleVision). But if enough affected NY consumers file legitimate complaints about Comcast with his Consumer Frauds Bureau, he’ll be all over it like stink on shit.

  39. Aesteval says:

    I have one purchase experience with Dell and I haven’t had any
    problems. Then again, one purchase experience counts as 100% doing the
    order online and not dealing with a sales rep, being damn near OCD in
    ensuring my purchase qualified for promotional financing, and being
    able to pretty much do 100% of my own tech support and upgrades. So
    yeah, not having to deal with any living people might be why I made out
    so well.

  40. dottat1 says:

    man… did someone wake up on the wrong side of dell.

  41. puyro {who was banned for "junk comments" what? says:

    I love my Dell laptop >.> But, I didn’t mess around with financing… paid for it myself online (all 1200 dollars of it) Had one problem (that was my fault) and Dell overnighted me the part I needed after speaking to a person who spoke perfect English. Have had the same laptop for two years and it functions as new.

  42. CCCombobreaker says:

    @joellevand:

    Dell doesnt care as much anymore because now 80% of their business is to the government.

  43. Glad to have abandoned you a long long time ago Dell.

  44. Invalid_User_Name says:

    Everybody: pay cash. Save your money and buy it: no financing anything with anyone and we’ll all be better off.

  45. lastfm says:

    This hits home. My Dell Vostro wouldn’t turn off, power button not working. First tech was from Qualserve. He replaced the motherboard, made problem worse. Second tech came out, replaced the palm rest. Now it won’t stay on. Second tech was from Texas something or another (subcontractor). She claims a defective, refurbished, replacement motherboard, just like this judgment stated. Third tech will be out her later this week to replace motherboard (again), heatsink, and processor.

    I’m on day 8 of this ordeal, so much for next business day on-site.

  46. mycroft2000 says:

    My personal rule is that no company I deal with ever gets a second chance if it tries to screw me over. In the last 10 years, I’ve bought 3 Dell desktops and a laptop, and have been very pleased with them.

    That said, I always paid in full up-front. Financing schemes always give me the willies, and I’ve never used one for anything.

  47. After the state of NY finishes with Dell, they can go after the competition. They all do the same thing.

    I avoided all the big guys on my most recent purchase and went with a “boutique” company.

    They contracted with a well-known tech support service for supposed “on site” service. It was just as hard getting onsite service from them as from Dell (or HP, Gateway etc).

    It’s no wonder 20% of consumers don’t own a home computer. They’ve probably heard stories like this and were even more scared of taking the plunge.

  48. Christopher says:

    @silencedotcom: 4ster already did, but his comment was in much better taste than the traditional “shoulda got a Mac” form. (Read the last section of the Michael Dell Wikipedia article if you don’t know what he’s alluding to.)

  49. RetailGuy83 says:

    @Meg Marco, how did you beat Ben to the punch on this one? Good job!

  50. BlackFlag55 says:

    Dude … you’re gettin’ a subpoena!

  51. Lambasted says:

    @JulesWinnfield: I had already checked to see if Comcast does business in New York. It does, which would put it within Cuomo’s jurisdictional reach.

    Here’s hoping that if he makes some headway with Dell, Comcast or some other dastardly company, may be next on his hit list. And if citizens really get lucky, perhaps some of the cowardly attorney generals of other states will jump into the fray. Viva la Revolution!

  52. kangaroo says:

    @khiltd: that was the funniest fucking thing since a soup sandwich.

  53. sixsnowflakes says:

    I luv Dell. I had my Dell repaired just last week–first problem with my laptop in 3 years. I used their online chat to schedule a repair. Everything went quickly and without problem.

    Mr. Cuomo should go after HP. You couldn’t pay me to take one of their machines after I had so many problems in just the first year, and then they claimed I didn’t have a warranty or sent the laptop back with out being repaired until my warranty really did expire. I faxed and emailed the information over 100 times. A BBB complaint got them to call me, but they still returned the laptop unrepaired.

  54. DinoRubble says:

    My experience with Dell tech support is the reason I switched to Apple. This was about five – six years ago. And while I haven’t drunk from the Cup of His Stevieness’s Kool-Aid, I’ve not had any similar experiences on my PowerBook or when I upgraded my MacBook Pro.

  55. strathmeyer says:

    Ah, I remember Dell customer service, some foreign guy reading a worthless script that was on the web.

  56. parrotuya says:

    Dude! Don’t buy a dell. Don’t do it! Dude!

  57. AngryEwok says:

    To the gallows, I say.

  58. I still love Dell.

    Hard drive failed in the wife’s computer, confirmed it with a diagnostic test, contacted Dell Tech Support with the diagnostic results and they had a new drive out to me the very next day.

  59. My company exclusively buys Dell, all business models with business-grade warranties. I’ve never had a problem contacting Dell for service on these computers, and wait times are never longer than 4 minutes.

    So this is what I recommend to anyone who asks: Dell has done a great job of pricing low end computers very attractively. If that’s what’s right for you, buy a Vostro or Dimension with a business-grade warranty from Dell Small Business. Yes, individuals can buy from Dell SB too.

  60. blackmage439 says:

    @kspray–dad: @Blackneto:

    I’m with you both. My personal experiences with Dell have been mostly positive. They tried to pull a billing bait & switch on my parents, but that was resolved by contacting the BBB.

    Now, however, they’re on my bad side. I swear to god their Memorial Day sale ran through the 29th of May. Come yesterday, the deal has vanished, all references to it have been deleted (i.e. the web pages detailing the sale now lead to 404 errors), and it has been replaced by a crappier 3-day sale, with savings of an average $200 LESS. I rarely get beet-red in the face, but that made my blood boil.

    Even though I’ve been a loyal Dell customer for over three years, I’m seriously considering looking into an HP instead. Sure, their service seems to be a perpetual black-hole, but the systems we have at the school I work at seem to be of decent quality. What a confusing state of affairs…

  61. BearTack says:

    Dell deals differently with individuals than it does with companies. I worked for an organization that would sometimes order 5000 at a time, and was always good for more. I never had a problem with Dell service on the organization account.

    As a personal buyer of Dell’s, never again.

  62. MadMax956 says:

    My experience with Dell has been a nightmare. My Dell printer died a month after installing it, the CD/DVDR drive died a month after that, then the memory went out, the the motherboard went out, then the harddrive had to be replaced, now they have made me wipe out all my data and try to reinstall the OS again. Unfortunately for me, they don’t know what the hell they are doing, and my computer is still completely dead because they say the recovery disk I have is bad and I’ve been waiting over a week for the new disks. I would rather stab my eyes out with a hot poker than deal with the idiot technicians in India ever again. DON’T BUY DELL!

  63. Tremblor says:

    Several years ago I (stupidly) bought a dell wit “0% financing for 1 year” (when run through DFS) I got a bit more expensive of a system than I would have otherwise gotten. A few months of payments later I realize I’m paying 27%. I call up and they tell me “the 0% didn’t apply to you”. I paid the rest of that computer off right quick.

  64. AustinTXProgrammer says:

    I used to work for Dell in support from 1995-1996, when Dell had VERY high customer satisfaction. We took a lot of pride in the tech support department. We were Dell employees and worked at the Dell headquarters in Austin, then Round Rock. There was one day that you couldn’t get support do to an ice storm and the fact there were no other call centers.

    We still had to have customers take the cover off their computer to reseat cables. I had one old lady refuse because there was electricity, and all the assurances in the world that the power supply was a separately enclosed part wouldn’t help.

    Normally it wasn’t a problem. If a CEO of a company called in (I worked the night shift and handled direct and major accounts) and refused to work with us, it almost ALWAYS went like this:

    Customer: I paid for the computer with the warranty and I need it for my business. I can’t waste time trying to fix it with you, send a technician.

    Me: Its 2 in the morning. We are way past the 5pm cutoff for next business day service, so its going to be 36 hours before I can get a technician onsite. I can fix 90% of these problems on the phone in about 30 minutes.

    Customer: I guess we should proceed.

  65. newfenoix says:

    How totally unfair of New York to do this to poor Dell. We all know that’s its not Dell’s fault, its the consumers fault for expecting good products and good cs. Hasn’t it been said by some on this site that making a company live up to their WRITTEN policies is just an asinine entitlement that undeserving people expect?

    And, we all know that people are fools for buying anything other than Apple computers, don’t we. We hear it enough here don’t we?

    Ok, enough jack ass stuff…
    Thank God that at least ONE state has stepped in to FORCE a company to do what it promises. And I know that’s its a hard pill to swallow for all of you that want to blame the consumer for EVERYTHING!

    And yes, this only applies in the state of New York but it will open a door for other suits to be filled in other states. In this economy, if a company does not provide good customer service, they will suffer.

    A MAJOR VICTORY FOR CONSUMERS

  66. quail says:

    @blackmage439: Don’t do HP/Compaq! You may be upset with Dell but my experience puts HP and all of their stuff way at the top of the crap pile. I’ve heard countless horror stories from Dell’s consumer side, but since I’ve only dealt with small business I’ve never had much of a headache.

    In the last few years here’s what I’ve experienced and learned. Never buy a laptop when a desktop will do. Always buy from the business side of a company. And do your research, usually the more expensive PCs are expensive for a reason. They are built to last more than 2 years, let alone 9 months.

  67. darkrose says:

    I build all my computers, except my laptop, which is a dell. I have had no problems with it at all.

    Granted, the first thing I did was format it and install Ubuntu, but hey…

  68. axiomatic says:

    You guys all realize you are not really buying a Dell or an HP or a whatever right?

    These companies all buy a platform from an ODM like Foxconn, Wistron, Sager, etc. and skin them with their respective company logos.

    Dell never really made their own stuff. But back when Compaq and HP and IBM were actually manufacturing their own gear there was definitely some interesting innovation going on.

    Blame the “suits” for the current state of horrible PC’s, the brand doesn’t really matter anymore.

  69. Trai_Dep says:

    If Dell sold abacuses, they’d be missing the little wooden beads.
    Yet some customers would still defend their purchase.

  70. HOP says:

    well, this saved me, i was about to purchase a DELL desktop..it came with free shipping and no taxes…..after reading all the above, i guess i’ll get an hp at sam’s club….i have two dell computers, a desktop i picked off the local refuse transfer station pile and a laptop i picked up at a yard sale…..the desktop i use for my amateur radio and the laptop is my portable…..i have had no trouble with either unit….that’s why i was thinking of replacing my 6yr old hp desktop with a dell….not after this stuff…..

  71. Nicholeigh says:

    Interestingly enough we just bought a Dell and are not receiving the 6 months no interest that was advertised even though when we purchased the laptop it indicated that we qualified. Go figure…..

  72. e.varden says:

    @blackmage439: OMG noes!

    Not Hewlett-Packard low-end!

    Total crap. And with NO consumer support.

    DO NOT BUY!

    I been there. I am totes ripped off. DO NOT BUY!. [I am going for Canon, a product that apparently works.]

  73. Phreggs says:

    The DPA (Dell Preferred Account) actually mentions that the interest rate is a seperate approval, ran through by CIT Bank.

    Anywho, i’ve bought 2 laptops in the past from Dell, and have now just purchased a Dell XPS 420. Never had an issue with Dell that couldnt be resolved by calling them/chatting with them.

    I also used to work for Dell, and know a great deal more of the in’s and out’s.

  74. Megm says:

    Dell is still doing this. Now they will repair hard drive under warranty (after about 7 excruciating hours trying to get through to customer service) but when software issues occur becuase all the software has to be reloaded on a new hard drive…they charge you a fee to assist you which is 1/4 the price of the computer….How many peSuddenly there are ssues…ople pay for this crap…when will someone actually REALLY penalize Dell for these unfair business parctices….