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Dell Settles State Lawsuit Alleging Violations Of Wisconsin's Unfair Sales Act And Consumer Credit Laws

 

Dell to Provide Restitution To Eligible Consumers, Pay Fees and Costs

 

MADISON Consumers who were improperly billed, failed to receive promised rebates, or received promises of warranty services never delivered may be eligible for restitution thanks to a lawsuit brought against Dell by Wisconsin Attorney General J.B. Van Hollen.   Dell has agreed to resolve these allegations and those brought by 33 other states by entering into an agreement whereby Dell will provide restitution to Dell customers who experienced problems with the companys financing promotions, rebate offers, technical support and repair policies.

 

Consumers shouldnt be promised one thing at the time of sale and delivered something else, Van Hollen said.  Companies who make representations about price and service need to make those representations clear and hold up their end of the bargain.  Todays agreement with Dell requires disclosures to prevent future communication breakdowns and ensures that customers who are owed money are paid. 

 

Under the agreement, Texas-based Dell, Inc., and its subsidiary, Dell Financial Services, LLC, admit no wrongdoing but agree to pay $1.5 million in restitution to eligible consumers who file claims postmarked by April 13, 2009.  Dell will pay an additional $1.85 million to the states for reimbursement of legal costs and other expenses, of which Wisconsin will receive $46,666.  

 

The investigation was led by Attorneys General in Washington and Connecticut, who looked into Dells sales practices after customers complained about an array of issues.    Some applied for zero-percent financing then were charged higher interest rates. Others had trouble obtaining warranty service on their Dell computers. Many said they never received promised rebates. 

 

For example, one consumer said she made a purchase with zero-percent financing for 18 months and made her payments on time. But the last payment was applied late by Dell. The customer was then billed $668 interest for the entire financing period. 

 

Dell cooperated fully with the Attorneys General during their investigation.  

 

CONSUMER REFUND REQUESTS

 

It is not known precisely how many consumers in Wisconsin or nationwide may be entitled to refunds under the settlement.  Consumers may be eligible for restitution if (1) they have a valid complaint concerning a product that was purchased between April 1, 2005, and April 13, 2009, and is addressed by the agreement and (2) Dell owes them money. 

 

Wisconsin residents who havent submitted complaints but believe they are eligible for refunds should make a request by downloading a claim form at  
http://www.doj.state.wi.us/dls/ConsProt/dell_form.pdf. (This form is no longer available)

 

Consumers can also call 608 266-8940 between 8 a.m. and 4 p.m. weekdays to request a form by mail.  

 

The deadline to submit claims is April 13, 2009. 

 

ADDITIONAL PRACTICES TO PROTECT AGAINST FUTURE VIOLATIONS:

 

In addition to providing restitution and paying costs and other expenses, Dell agreed to the following to protect against future violations: 

 

FINANCING AND CREDIT OFFERS: DISCLOSURES

 

  • Disclose in advertisements for promotional credit offers that the majority of consumers who apply wont qualify for the best annual percentage rate (APR), and disclose the range of initial APRs that consumers who are not considered the most qualified borrowers are likely to receive; 
  • Inform consumers considering applying for promotional financing that the application is for a revolving open credit account, that minimum monthly payments are required and that approval of the account does not guarantee that the consumer will also qualify for conditional financing promotions (such as zero-percent interest for 90 days);  
  • Explain how finance charges are calculated, disclose any penalties and inform the consumer whether subsequent purchases made using the credit account will be subject to the same or different financing terms; 
  • At the time of credit acceptance, disclose whether the applicant has qualified for any conditional financing promotion. 

 

WARRANTIES AND SERVICES

 

  • Fulfill its warranty obligations within 30 days from the date of notification or receipt of a defective product; 
  • Disclose whether phone-based troubleshooting or remote diagnosis is required before Dell will provide on-site repair or warranty-related service.

 

REBATES

 

  • If a rebate is available, provide the necessary rebate documentation at the time product is delivered or the service is provided; 
  • Mail rebates within the specified timeframe, or within 30 days if no date is specified. 

 

 

ADDITIONAL PROCEDURES AND POLICIES

  • Implement written policies to ensure compliance with the settlement, including procedures that address issues such as:

    • Informing consumers of their right to cancel orders made with the Dell Credit Account within three days after receiving final credit approval and the written terms and conditions;
    • Communication between Dell and Dell Financial Services when a consumer returns a product purchased with credit.
    • Removing consumer accounts from collection agencies and providing accurate information to credit-reporting bureaus. 
  • Substantiate any claims Dell makes about the quality of its customer service.

 

In addition to Wisconsin, the following states participated in the settlement:  Arizona, Arkansas, California, Connecticut, Delaware, Florida, Illinois, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Washington, West Virginia, and Vermont.

 

Assistant Attorney General Lara A. Sutherlin represented the State in this case, and investigative assistance was provided by the Wisconsin Department of Financial Institutions and the Wisconsin Department of Agriculture, Trade and Consumer Protection.

 

A copy of the complaint is available at:

 

2009 file: