committed consumer fraud, said a New York state supreme court on Tuesday,
by luring customers in with no-interest loans, and sticking them with high
interest loans instead – sometimes at interest rates higher than 20%.
Dell’s actions were a “bait and switch that left thousands of people paying
for essentially no service at all” said New York
attorney general Andrew M. Cuomo. “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.”
“This decision sends an important message that all corporations will be held
accountable for the promises they make to consumers,” he said.
N.Y. State Supreme Court Justice Joseph C. Teresi found that Dell and its
division, Dell Financial Services – which is a joint venture between Dell and
CIT Bank – committed a litany of wrongs: fraud, false advertising, as well as
abusive debt collection and deceptive business practices. Court findings
indicate that Dell used no-interest and no-payment financing offers to entice
customers to purchase a computer, and then denied the majority of loan
applications, sticking customers with a high-interest loan instead. Further,
Dell frequently billed customers for purchases on unauthorized accounts,
cancelled orders, or returned products – and then harassed the same customers
with abusive collection practices.
A Dell representative, speaking in an e-mailed statement to InformationWeek,
said that the company is undecided on whether or not it will attempt to appeal
the ruling. Dell, however, feels that only a few customers were affected; when
the dust eventually settles, the company said that it is confident that the courts
would soften their stance.
“We don't agree with this decision and will be defending our position
vigorously,” said the representative. “Our goal has been, and continues to be,
to provide the best customer experience possible.”
Commenters on the InformationWeek
article reported being hit with interest rates as high as 30 percent.
Dell, which recently has been attempting to rebuild its company image in
light of losing title of largest computer manufacturer to Hewlett-Packard,
claims to have placed a special emphasis on rebuilding its fallen customer
service reputation. The New York state ruling will likely be another black eye
for company founder Michael Dell, who recently returned
as Dell’s CEO after a three-year hiatus. Direct2Dell,
the company’s official blog about its products and services, so far remains
silent with regards to the ruling.
quote: ... just goes to show how avid daily tech readers are
quote: I still do recommend HP over Dell or Sony or Apple because HP gives you a better choice.
quote: Discover Card is one of the four major credit card brands issued primarily in the United States. The Discover Card was originally introduced by Sears in 1985, and was part of Dean Witter, and then Morgan Stanley, until 2007, when Discover Financial Services became an independent company.
quote: Seriously, this is extortion - demanding that someone collect money on your behalf in order to mail products in your state. A new tax has got to be this state's answer to everything.
quote: So in my best Bronx accent, I say to Dell, fawgeet abought it !
quote: Important Message to Our New York CustomersMay 23, 2008Dear Valued Newegg Customer,As a result of recent changes in the State of New York Tax Law requiring certain out-of-state retailers to collect and remit sales taxes to the State of New York, we regrettably inform you that Newegg.com must begin collecting applicable state and local sales tax for all orders shipped to New York addresses on or after June 1, 2008.Qualified business customers can continue to use the Newegg.com Sales Tax Exempt Form.We value our relationship with you and all of our New York customers. We apologize for any inconvenience caused by this change in New York law and assure you that we will continue to work hard to offer you the best prices, fastest shipping and award winning customer service you deserve.We look forward to continuing to provide you with the premier online shopping experience for all of your IT and Consumer Electronics needs.Sincerely,Bernard LuthiNewegg.comCompany Spokesperson andVice President of Merchandising
quote: This is just a way for my state to collect money without actually having to do anything.
quote: He/she represents you!