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Court Finds Dell Guilty of Fraud

May 29, 2008 -

Strike a blow for consumers. A blow that I didn't even know needed to be struck. After my horrible experience with CyberPower Systems, I've been more than ready to go back to Dell when I buy my next PC. Of course, I've never bought an extended warranty from Dell or used financing. For that matter, I don't think I've ever even used their tech support, although I may just be forgetting.

In any event, my uncle emailed me this article, and I thought it worthy of sharing. I did away with my news sidebar, so I'm blogging it.

May 28, 2008
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Dell was found guilty on Tuesday of fraud, false advertising, deceptive business practices and abusive debt collection practices in a case brought by the New York attorney general.

The Albany County Supreme Court found that Dell deprived customers of technical support that they bought or were eligible for under warranty in several ways, including by requiring people to wait for very long times on the phone, repeatedly transferring their calls and frequently disconnecting their calls.

Dell also often failed to provide onsite repairs for customers who bought contracts for such support and often blamed software when hardware was actually the problem, the court found. The company also sometimes refused to offer support when a support contract ended, even though the user had first complained about a problem before the end of the contract. Subscribers to a "next-day" repair service sometimes waited as long as a year for support, the court found.

Dell and affiliate Dell Financial Services also advertised special no-interest financing, but denied almost everyone those terms. It often sold customers products without informing them that they didn't qualify for the special financing terms and then charged them interest rates as high as 30 percent, the court said.

Dell and DFS also often incorrectly billed people for cancelled orders and for accounts they didn't authorize. The companies then harassed the people for payment, using illegal billing and collection practices, the court said.

The court will determine how much Dell will have to pay in restitution to affected customers and will also require Dell to pay the state of New York the profits it made on these deceptive practices. In addition, the ruling prohibits Dell and DFS from continuing to engage in the fraudulent activities.

The court laid out plans for investigating how many people have been affected as a way to determine restitution. Dell hopes that the court will find that only a few people had bad experiences. "We're confident that when the proceedings are completed, the court will determine that only a relatively small number of customers have been affected," Dell said in a statement. "We believe that our customer service levels are at or above industry standards."
Comments on Court Finds Dell Guilty of Fraud
 
Comment Thu, May 29 - 6:46 PM by tagger
At the risk of putting too fine a point on this, while it's true that I've had my share of outsourcing heartburn with Dell it is also a fact that I own five Dell desktop/server PCs, buy Dell for companies I consult with and recommend Dell with a couple of caveats, to wit:

1. Don't buy "home" anything. Buy from Dell business or Dell outlet.

2. Never buy an extended warranty unless you're buying a laptop.

3. Never buy Vista preinstalled. Get XP with a Vista upgrade certificate (they'll *give* it to you if they think they're going to lose the sale).

4. If you call support and an Indian answers the phone, immediately demand to speak to a US tech. They call this an "on-shore" rep. Swearing helps (the Indians hate swearing), but avoid the eff word.

5. Never order from Dell's Web site--it's a train wreck. Spec out the system on the site (use Dell business or Dell outlet) then call the 800 number to place the actual order. Make sure you get the right discounts!

6. Always hold out for free shipping. It's the least they can do since they started stealing money for sales tax.

7. Never forget which way the money is going--you're the customer. Threats work. "Hey pal--I hear HP and IBM sell PCs too" can be used to good effect.