Dell to Pay $3.85 Million in Settlement with US States

IDG News Service — Dell will pay US$3.85 million to 46 U.S. states under a settlement agreement involving allegations that the company used deceptive practices to sell its products.

As part of the settlement, Dell will provide restitution to customers who experienced problems with the company's financing promotions, rebate offers, technical support and repair policies, according to state attorneys general. The company will pay $1.5 million to a restitution account and the rest to the states to reimburse legal costs and other expenses, said Dell, which did not admit to wrongdoing.

States started investigating Dell's sales practices after receiving complaints on an array of issues. Some customers never received rebates they were promised, while those who applied for zero-percent financing were charged higher interest rates. Some consumers also had trouble obtaining warranty service on their Dell PCs, according to the Washington State Attorney General's Office.

"The deals Dell made and the terms computer buyers thought they agreed to didn't always compute," said Washington Assistant Attorney General Katherine Tassi in a written statement.

Customers are eligible for restitution if they purchased a Dell product between April 1, 2005, and April 13, 2009, and have a complaint addressed by the agreement. Consumers must file their claims by April 13.

The issues represented only a small percentage of the tens of millions of Dell consumer transactions in the states during the four-year period, Dell said in a statement. "Dell had previously addressed the issues directly with many of the customers involved and many were satisfactorily resolved prior to the states' involvement," the company said.

Dell has also agreed to provide further disclosures to make sure that customers are fully informed about its financing and service offers.

"This settlement ensures that Dell consumers will receive full disclosure concerning Dell's promotional offers and provides for changes in Dell's business practices that will aid consumers in making informed choices about purchasing Dell products and services," Massachusetts Attorney General Martha Coakley said in a statement.

The states involved in the settlement are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia, Vermont, Virginia and Wisconsin.