May 16th, 2007

New York State Accuses Dell Of Deceptive Business Tactics

By Christopher Lawton
Wall Street Journal

New York Attorney General Andrew Cuomo filed a lawsuit yesterday that accuses computer maker Dell Inc. of deceiving consumers to increase computer sales.

The lawsuit, filed in Albany County Supreme Court, charges that Dell and affiliate Dell Financial Services LP have engaged in fraud, false advertising and deceptive business practices.

The suit alleges that Dell, among other things, misleads customers with promises of attractive financing only to leave them with expensive credit lines. The lawsuit says Dell denies promised rebates, and fails to honor warranties and service contracts by misleading customers and making it difficult to get technical support.

Dell spokesman Bob Pearson said the Round Rock, Texas, company would fight the complaint. “Our customers are our top priority at Dell,” he wrote in an emailed statement. “We are confident that our practices will be found to be fair and appropriate.”

The suit seeks an injunction against Dell’s alleged behavior and an order requiring the company to pay unspecified damages to affected customers.

Besides losing market share to Hewlett-Packard Co., Dell has been embroiled in an investigation into its accounting practices by the Securities and Exchange Commission and its own audit committee, among others. In January, founder and Dell Chairman Michael Dell resumed the chief-executive post at the company after former CEO Kevin Rollins resigned.


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