Home > News & Reports
Dell Settlement with State Attorneys General will Refund Consumers $3.35 Million
January 12, 2009
FOR IMMEDIATE RELEASE
Contact: Carolyn Silsby 207/626-8829
Dell and Its Subsidiary, Dell Financial Services, Agree to Make Changes in Their Business Practices and to Refund Consumers Under a $3.35 Million Settlement with State Attorneys General
The Attorneys General of thirty-four states, including Maine, announced today that they have entered into a settlement with Dell, Inc. and its subsidiary, Dell Financial Services (collectively, “Dell”), that addresses the states’ serious concerns about Dell’s financing promotions, rebate offers, technical support and warranty service. This settlement also provides $1.5 million in restitution to eligible consumers who file claims by April 13, 2009. Dell will also pay an additional $1.85 million to the states for reimbursement of legal costs and other expenses, of which Maine is expected to receive $75,000.
Attorney General Janet T. Mills said, “Dell and its subsidiary, Dell Financial Services, have taken unfair advantage of Maine consumers. Dell uses deceptive financing and rebate offers as enticements to buy, then they fail to fulfill warranty obligations. This settlement brings an end to these practices and provides relief to a number of consumers who purchased Dell products.”
Besides Maine, the states involved in the settlement are: Arizona, Arkansas, California, Connecticut, Delaware, Florida, Illinois, Iowa, Kentucky, Louisiana, 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, Vermont, and Wisconsin.
Under the settlement, Dell agreed to the following:
FINANCING AND CREDIT OFFERS
• Disclose in advertisements for promotional credit offers that the majority of consumers who apply won’t quality 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.
• 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 time frame, 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:
o 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.
o Communication between Dell and Dell Financial Services when a consumer returns a product purchased with credit.
o 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. Dell can use the term “award-winning” to describe its customer service only if the company received such an award within the past 18 months.
CONSUMER REFUND REQUESTS:
It’s not yet known how many consumers in Maine or nationwide may be entitled to refunds under the settlement. Consumers may be eligible for restitution if 1) they file a claim with the Attorney General’s Office by April 13, 2009 regarding a Dell purchase made between April 1, 2005 and April 13, 2009 and which concerns conduct that is addressed by the agreement; and 2) they incurred expenses out-of-pocket.
Maine residents who haven’t submitted complaints but believe they are eligible for refunds may obtain the claim form by downloading it from the Attorney General’s website:
Claim Form or by contacting the Consumer Protection Division at 207-626-8861 to leave a message requesting that a claim form be sent. Eligible consumers who already filed complaints with the Attorney General’s Office after April 1, 2005 will be mailed claim forms. Claim Form Instructions
Consumers in other participating states should contact their Attorney General’s Office for further information.