Court Finds Dell Guilty of Fraud

May 29, 2008

According to Court Finds Dell Guilty of Fraud – CIO.com – Business Technology Leadership:

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.

I can’t say anything about Dell, as I don’t know if this is an unfortunate event or an endemic problem in the industry, but either way, it is a wake-up call to the industry.

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