Office of the Attorney General
Coalition of 34 States Settles with Dell and Dell Financial Systems Over Customer Service Issues

Attorney General Jack Conway, along with the attorneys general of 33 other states, announced today an agreement with Dell, Inc. and its subsidiary, Dell Financial Services, LLC, resolving an investigation into financing promotions, rebate offers, technical support and repair policies.

Under the agreement filed in Franklin Circuit Court, Dell and Dell Financial Services 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 also pay an additional $1.85 million to the states for reimbursement of legal costs and other expenses, of which Kentucky will receive $46,667.  Dell cooperated fully with the Attorneys General during their investigation.

“This agreement will provide restitution to consumers who were promised one price and charged another and it will ensure that Dell delivers on promises to provide quality customer service,” General Conway said.  “The agreement also requires prompt distribution of promised rebates and timely disclosures to customers about their computer purchase financing so they will know the exact terms of the deal.”

The multistate investigation looked into Dell’s 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, or said they never received promised rebates.

Under the settlement, Dell agreed to the following:

Financing and credit offers

Clearly inform customers about the terms of credit offers, and that applying for credit does not guarantee qualification for a financing promotion.

Clearly disclose at the time of approval for financing a purchase, whether the customer qualified for a financing promotion and that the customer has a three day right to cancel the order.

Set up procedures for making timely refunds and credits on returned items.

Warranties and services

Tell customers whether telephone troubleshooting or remote diagnosis is required before they can get on-site or warranty service.

Take care of warranty work within 30 days of a warranty claim.

Rebates

Give customers all required rebate documentation at the time of delivery or providing the service, and pay rebates on time (either by the time shown in the rebate offer, or 30 days if no time is specified).

Additional procedures and policies

Quickly respond to the states when they forward customer complaints to Dell, and keep records of those complaints for three years.

Substantiate claims Dell makes about the quality of customer service (such as “award-winning”).

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, Vermont, and Wisconsin.

Consumer refund requests

It’s not yet known how many consumers in Kentucky or nationwide may be entitled to refunds under the settlement. Consumers may be eligible for refunds only for verifiable out-of-pocket losses on issues covered by the agreement (financing promotions, rebates, warranty service) concerning a product or service bought between April 1, 2005, and April 13, 2009.

The deadline to submit claims is April 13, 2009.  Claims not postmarked by April 13, 2009, will not be eligible.  The amount of money issued to individual consumers depends on the number of eligible recipients and the total amount claimed.

Kentucky residents may download a claim form at ag.ky.gov/dell, or may call 888-432-9257 to request a claim form by mail.