Dell fined $4 million for "scamming consumers"

 

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By Stuart Turton

Posted on 16 Sep 2009 at 09:26

Dell has agreed to pay $4 million to settle charges of "fraudulent and deceptive business practices".

The charges were brought by the New York attorney general in 2007, who alleged that Dell has misled customers by promoting zero interest credit deals on new PCs. However, applications for these deals were often denied, with the customer then being lured into buying at a significantly higher rate - often around 20%.

To compound matters, Dell then regularly failed to provide the support services that customers had paid for.

Though Dell vehemently denied the allegations, New York's Supreme Court ruled that Dell was guilty of fraud, leading to the settlement with the New York attorney general.

As part of the deal, Dell will pay $4 million "in restitution, penalties and costs", but is absolved of the need to admit any wrongdoing. It will also change its advertising to offer detailed information on the level of service customers will receive, and the percentage of people likely to qualify for its low-cost financing deals.

"Dell and its subsidiary, Dell Financial Services (DFS), have agreed to pay the Attorney General's Office $4 million in restitution, penalties and costs to resolve charges of fraudulent and deceptive business practices that scammed consumers across New York State," says Attorney General Cuomo in a statement.

"This announcement is the final step in ensuring New Yorkers harmed by Dell's deceptive and illegal business practices are fully compensated. Going forward, this deal means that Dell will have to clearly and fully disclose the terms and conditions of their products and services, to avoid this kind of fraud at the consumer’s expense."

Dell claimed it was happy the matter was resolved.