New York State Finds Dell Guilty of Fraud

New York State Finds Dell Guilty of Fraud

Tuesday, May 27, 2008 - by Daniel A. Begun
The New York State Supreme Court issued a ruling today against Dell and Dell Financial Services (DFS), finding the company guilty of "fraud, false advertising, deceptive business practices, and abusive debt collection practices." The ruling is the end result of a lawsuit filed by New York State Attorney General, Andrew M Cuomo, in May 2007. After the ruling, Cuomo issued a statement saying that Dell and DFS essentially used "a bait and switch that left thousands of people paying for essentially no service at all." He also said: 

"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."


Attorney General Andrew Cuomo - Press Conference

The specific practices that Dell was found guilty of are:

  • Charging customers 20 percent interest on what was advertised to be no-interest financing.
  • Billing customers for canceled orders and returned products, and then harassing the customers with "illegal billing and collection activity."
  • Failing to provide in-warranty service in a timely manner.
  • Failing to fulfill promised rebates.
The New York State Supreme Court has yet to rule on how much Dell must give back to its customers and now much Dell must pay New York State. After today's ruling, Dell issued a statement in response: "We don't agree with this decision and will be defending our position vigorously." Also in the statement, Dell speculated that the amounts it would ultimately owe would be small as only a "relatively small number of customers" were impacted by these practices.

This is not the first time the Empire State has tangled with online retailers. New York State's "Amazon Tax" was just signed into law by New York Governor David Paterson a few weeks ago. The law, which goes into effect June 1, requires that Amazon collect sales tax on all purchases made by customers who reside in New York State. The state's argument is essentially that since some of Amazon's affiliates are based in New York, then all purchases made on Amazon by New York State residents are subject to New York State sales tax. Amazon is not sitting idling by and letting this happen without a fight, however; Amazon has sued New York State, arguing that the new law is unconstitutional.

New York state makes a powerful statement when it successfully goes after predatory business practices of the likes of Dell--looking out for the best interests of the consumer. The "Amazon Tax," on the other hand, is New York State just looking out for the best interests of New York State.
Via: Information Week | News Archive | Tags: Dell, New York, DS, state, New York State
Login or Register to Comment

Comments

By ice_73 on May 27, 2008

 hmm, my friend had a bad experience with dell for inwarranty repair and stuff but that was a few years back.... how recent are these alligations?

By Crisis Causer on May 27, 2008

Didn't Dell win some kind of worst customer "award" or something?  I'm not surprised to see this at all. 

By SqUiD267 on May 28, 2008

I wouldn't be surprised if they did. My dad's dell laptop had a simple problem and they couldn't figure it out and asked him to reintall windows. I fixed in seconds, w/o reinstalling windows.

By entermymatrix03 on May 28, 2008

The problem that they have is they go by the books too much. When my wife and I first started dating I had to go thru their customer service for a new PSU. The guy kept telling me to take stuff out and plug it back in and see if it would come on. I knew it was the PSU but I still had to sit on the phone with him for almost 2 hours. When the in-home tech guy came a few days later...he replaced the ram, graphics card, and the PSU. ????

By ice_73 on May 28, 2008

i wouldnt mind having other stuff replaced. the hassle of getting anything replaced is the problem, but thats not only for dell. every company has that.

By Dev on May 28, 2008

I think everybody has had their problems with Dell. Finally their deserved bad reputation is catching up with them.

Dev

By ice_73 on May 28, 2008

Dev:

I think everybody has had their problems with Dell. Finally their deserved bad reputation is catching up with them.

Dev



correct me if im wrong but doesnt the xps line of dell products have their own support line?

By Dev on May 28, 2008

 It does have a seperate tech support. In any event XPS line is ending it won't be around for too long.

Dev

By ice_73 on May 28, 2008

Dev:

 It does have a seperate tech support. In any event XPS line is ending it won't be around for too long.

Dev



i hope it will. xps > alienware.

alienware = overpriced junk.

By entermymatrix03 on May 28, 2008

alienware = cool ass case design! : )  

By ice_73 on May 28, 2008

 alot of people disagree

By Super Dave on May 28, 2008

But not me! Dell bought Alienware for a reason, and now they are dropping their XPS line for a reason. Care to guess why?

By amdcrankitup on May 29, 2008

Super Dave:
But not me! Dell bought Alienware for a reason, and now they are dropping their XPS line for a reason. Care to guess why?

 

See YOU LEARN SOMETHONG EVERYDAY! I did not know that about Alienware!

By entermymatrix03 on May 29, 2008

yeah, they bought Alienware and then HP countered by buying VooDoo PC.

Post a Comment