Burned by Dell? Some might get payback

May 28, 2008 5:35:18 PM PDT
Dell, one of the world's largest computer manufacturers, may be forced to pay restitution to hundreds of customers apparently stung by shoddy customer service and deceptive financing offers. New York State Supreme Court Justice Joseph Teresi ruled on Tuesday that Dell "engaged in repeated misleading, deceptive and unlawful business conduct" in the way it promoted its "next day" repair service and "no interest" financing for its products.

The company has said it disagrees with the judge's decision and maintains that its customer service is "at or above industry standards." Dell spokesman Jess Blackburn told ABC News that the company has yet to decide whether it will appeal the judge's ruling.

The judge's ruling came in response to a lawsuit filed by New York State Attorney General Andrew Cuomo in May 2007. ABC's "Good Morning America" broke the news of Cuomo's investigation, which reviewed complaints by 700 different Dell customers living in New York.

Cuomo's office is still compiling a list of consumers who might be entitled to restitution, and a spokesman said the attorney general was not yet ready to estimate the number of people involved or the amount of financial restitution they are owed.

"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," Cuomo said in a statement on Tuesday.

Since the lawsuit was filed, more than 1,000 other complaints about Dell have come in to the attorney general's office, a spokesman said.

Though the decision on whether to appeal has not been made, Dell said in a written statement that it disagreed with the judge's decision and would vigorously defend its position.

"We believe that our customer service levels are at or above industry standards. We're confident that when the proceedings are completed, the court will determine that only a relatively small number of customers have been affected," the company said.

Teresi has given the attorney general's office until Dec. 1 to submit information on customer's claims and how much restitution they may be owed.

In his written decision, Teresi accepted many of the allegations put forward by the attorney general's office, including that consumers have grown so frustrated with "long holds and transfers" on Dell's technical support lines that they gave up on trying to obtain repairs under Dell's warranties.

Of those who did reach technical support representatives, according to the ruling, some were allegedly instructed to "disassemble their entire 'hard drive' and 'motherlode.'"

"Such measures do not appear to be within the reasonable and normal expectations of what would constitute 'telephone-based troubleshooting,'" the judge wrote.

Teresi also faulted Dell for promoting interest-free financing on its products while having "no intention of actually providing the advertised financing to the great majority" of customers.

According to the decision, most who applied were offered interest rates ranging from 16 percent to nearly 30 percent. The judge wrote it was possible that customers signed up for Dell credit accounts believing that they had qualified for no-interest financing when in fact, they had not.

The New York State Attorney General's office is continuing to collect complaints from customers who made Dell purchases in New York. Complaint forms are available at http://www.oag.state.ny.us/

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