"Dude, you're gettin' a lawsuit!"

[giza]

New York State Suing Dell Computer Makers

New York State is suing the makers of Dell computers for what it calls deceptive business practices and fraud. The lawsuit could cost the computer maker millions.

New York Attorney General Andrew Cuomo filed the suit in New York Supreme Court, alleging Dell Incorporated of ripping off its customers and failing to deliver on customer support contracts.

The suit claims Dell offered zero percent financing on its computers, but then switched as many as 85 percent of those who applied to a higher rate without their knowledge. The lawsuit also says Dell sold contracts for in-home repair service, but failed to deliver, in some cases required customers to disassemble their own computers.

I can't say the thing about in-home repair service surprises me. It always seemed as though the overhead of having a tech drive to your house and replace the part on site (as opposed to say, having the customer bring their computer in to the shop) would have made it difficult to make a profit off that sort of support.

The thing about switching the interest rate on the loans really does shock me, though. Partly that Dell actually pulled a stunt like that, but that people failed notice that their principal wasn't dropping as quickly as they thought it would. I wonder how people would have noticed if a car dealership tried that trick? I wonder how many car dealerships have already tried that trick?

Comments

[simbab.livejournal.com]

I am sooo not surprised about this kind of stuff. What's surprising is that they got caught and are being prosecuted.

Financing computers is generally a bad idea, IMHO, unless you are buying a fairly expensive one.

semi-OT, but there's a fairly interesting article in BusinessWeek (it's my grandfather's subscription, not mine, lest anyone think I've sold out :P) about the flourishing of "subprime" credit...which is a Nice Polite Businessman's term for raping the poor. Then changing bankruptcy laws to cut off their escape. Then demonizing the victims in political rhetoric...

[tosdragon.livejournal.com]

Ditto on the part about the support, no shock to me.

The financing though... I'll be interested to see the shakeout on this one, specifically WHO held the financing. Most of those zero interest loans on computer equipment, (or exercise equipment, or furniture, smaller loans in general,) are through third party companies like AMGEN or others. I used to sell exercise equipment at one point with a zero interest for X amount of time thing, and I can promise that if you even happen to fart when you are putting the check in the envelope, they will use it as an excuse to jack your rate in to something nearly userous. My guess might be that the financing would be through an outfit like that, but again, it's only a guess. :)

[sr-foxley.livejournal.com]

What I find really surprising is that they're getting a class-action suit over this *again.* I was part of a class-action suit about 4 years ago over the exact same matter-- I was promised 6 months free of interest, paid it off in 2... and they charged me interest (at 21%, I think). Since I paid it off so quickly, it only ended up being something like $21... but that's $21 dollars they eventually had to pay me back.

Bastards. It seems to me that getting caught for the exact same type of civil suit ought to carry at least a double-penalty.