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Dell Loses Battle over Misleading Customers

By - Source: Tom's Hardware US | B 4 comments

A lawsuit that originally commenced last year, which claimed that the way Dell handled its customer financing and other services was very poor and misleading, has come to a close. Thirty-four state attorneys have reached a $3.35 million dollar multi-state settlement with the workings of the big “D”.

The original lawsuit kicked off accusing Dell and Dell Financial Services (DFS) of, generally, treating its customers poorly. To define poorly, the suit alleged that Dell never provided proper refunds to its customers, failed to provide repair services as advertised, and the worst of it all, Dell mislead its customers about its financing terms.

One example of how Dell was operating, was its ‘so-called’ PAY NO INTEREST for twelve(12) months when financing a notebook. Customers on a budget would purchase notebooks expecting not to pay any interest for the first twelve(12) months. Instead, on their third statement of finances from Dell Financial Services, customers were seeing large financing fee charges, outstanding interest payments, etc. Some customers ended up paying out the term immediately and ran to the Better Business Bureau where they settled for refunds.

Of the $3.35 million dollar settlement, $1.5 million will be dropped into an account specifically for customer restitution--the rest going towards legal fees and other legal mumbo-jumbo. So how do you go about getting even? If you have purchased a Dell product between April 1, 2005 and April 13, 2009 and your dealings fit one of the terms listed below, you may be entitled to some restitution.

  • A problem with a Dell financing officer
  • A problem with a Dell rebate
  • A problem with Dell financing
  • A problem with a Dell repair, warranty or servicing

Visit the Dell Settlement Claims site (or download the PDF forms here), fill everything out appropriately and have it submitted by April 13, 2009. Please be aware that not everyone is eligible for restitution and you may not get any settlement at all.

Dell has now claimed it will change how it does business within the guidelines of the aforementioned suit, such as :

  • Dell will NOT submit your information to a collecting agency for late payments if you claim a debt as invalid withsupporting documentation to back it up.
  • Dell will mail rebate payments in much more reasonable time frame that will be communicated to the customer. If no time frame is disclosed, it is considered to be thirty(30) days.
  • Dell is to provide means for all customer complaints in the form of mailing address, email address, and fax in phone numbers.
  • Dell CAN NOT claim that it provides on-site customer service or support unless it first clearly state that the customer must go through telephone-based support FIRST.
  • Dell MUST be specifically clear about its credit offerings. All terms and conditions, minimum monthly payment requirements, interest charges, financing charges, and penalties MUST be clearly stated to the customer.

Many customers that have experienced the issues surrounding all of this may breath a sigh of relief and hopefully put in their claims. There aren't any supporting evidence that tells exactly how many customers may have been affected by the business practices of Dell. But hopefully the $1.5 million set aside for restitution will return to rightful owners.

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  • 1 Hide
    JonnyDough , January 14, 2009 5:13 PM
    Dell has been misleading customers for years. I bought a Pentium III "gaming system" and it didn't even have an AGP slot. The spot where it should have been had the solder points but no plastic bracket to hold a card. Dell = sell you crap for as much as they can, and then back you with poor service in India.
  • 0 Hide
    jhansonxi , January 15, 2009 12:29 AM
    Selling a system with limited upgrade options isn't that uncommon, especially with business-class systems. While I would be surprised by a "gaming" system with only integrated video, the devil is in the specs and you need to be extra vigilant if you are going to be doing heavy gaming. If you are buying a "system" from a major vendor then you usually get a economy configuration with a warranty and tech support. If you want the best then you have to build it yourself but you are responsible for solving the technical problems.

    Many of the Socket 370 era Dell systems used a modified board made by Intel with some parts removed to save costs. A more annoying problem was their tendency to use non-standard power supply connections which made upgrades impossible and replacements expensive. I don't think they do that any more.
  • 1 Hide
    azxcvbnm321 , January 15, 2009 2:08 AM
    That's why I've always bought my systems from mom and pop stores. They've always been honest and I can customize my system AND pay less. There's no need to deal with a big company that will just put you on hold, if you have a problem with your mom and pop store purchase, you can just call them or go over there yourself and they'll handle things. Plus your system won't come loaded with advertising crap and run slow. Since vendors like Dell don't make their own components, there's no reason to buy from anyone but your local computer store.

    Dell knows that most people who buy from them are not computer savvy. Otherwise they'd buy a customized system from a local store, I've never seen a lower price with a Dell computer vs. my local stores. So people who don't know anything about computers will buy from Dell and won't realize they're getting ripped off. Incredible that Jonnydough chose Dell, but I bet he's one of the few people who figured out that he didn't have an AGP slot. Most Dell customers would just start playing games and not understand why the games were running slow (or not even realize the slowness).
  • 1 Hide
    JonnyDough , January 15, 2009 5:49 AM
    Since then I've taught myself an incredible amount about PCs. I read tech sites on a daily basis. I am not the same dolt I was at the age of 20. That was nearly 10 years ago and I could be A+ certified now with a tiny bit of studying. It's just that after having an experience like that and becoming an educated consumer I can see how so many people are duped. All you have to do is go to any local store and find someone looking at buying a PC. They have no clue.