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New York Attorney General Andrew Cuomo has announced that Dell and its subsidiary, Dell Financial Services (DFS), have agreed to pay his office $4 million in restitution, penalties and costs to settle charges of fraudulent and deceptive business practices that scammed consumers in the state.

Andrew Cuomo
NY Attorney General

The New York Supreme Court agreed with Attorney General Cuomo’s claims that Dell had engaged in fraud false advertising, deceptive business practices, and abusive debt collection practices.

According to the Court’s decision upholding the Attorney General’s lawsuit, Dell deprived consumers of technical support which they were entitled to under their warranty or service contract by:

• Repeatedly failing to provide timely on site repair to consumers who purchased service contracts promising “on site” and expedited service;
• Pressuring consumers, including those who purchased service contracts promising “on site” repair, to remove the external cover of their computer and remove, reinstall, and manipulate hardware components; and
• Discouraging consumers from seeking technical support; those who called Dell’s toll free number were subjected to long wait times, repeated transfers, and frequent disconnections.

The court concluded that Dell lured consumers to purchase its products with advertisements that offered “no interest” and “no payment” financing promotions. However the majority of consumers, even those with very good credit scores, were denied these deals. In a “bait and switch” scheme, DFS instead offered consumers financing at high interest rates, which often was more than 20 percent.

“Today’s announcement is the final step in ensuring New Yorkers harmed by Dell’s deceptive and illegal business practices are fully compensated,” said Attorney General Cuomo.

“Going forward, this deal means that Dell will have to clearly and fully disclose the terms and conditions of their products and services, to avoid this kind of fraud at the consumer’s expense.

Consumers harmed by Dell can file a claims form on the Attorney General’s website.