AG King announces settlement with Dell

(MONTGOMERY)- Attorney General Troy King today announced a $3.85 million multi-state settlement with Dell Inc. and Dell Financial Services, L.P. (DFS), for allegedly misleading consumers about financing terms, warranties and rebates. Alabama and at least 44 other states are participating in the settlement.

Today's settlement resolves allegations by the attorneys general that Dell misled consumers about financing terms; failed to pay rebates in a timely manner, if at all; and failed to provide prompt repairs and other consumer assistance that Dell promised under warranties and otherwise.

All consumers who have already lodged a complaint with the Attorney General's Office (and that has not yet been resolved by Dell) will be sent a claim form.  They must fill out this form in order to be eligible for restitution.  Additionally, any consumer who did not file a complaint, but believes he or she is owed money for the type of conduct by Dell covered in the settlement, can also fill out a claim form. Claims may only be filed for actions by Dell that occurred between April 1, 2005, and today. All forms must be post-marked no later than April 13, 2009, to be eligible for restitution.

Claim forms will be available on Attorney General King's can be requested by calling toll-free to Attorney General King's Office of Consumer Affairs at 1-800-392-5658.

In addition to the money, Dell has agreed to several measures that will provide greater transparency and fairness to consumers. These measures include clearer and more conspicuous advertisements and disclosures to consumers about its financing terms and warranty services, prompter rebates and more intense efforts to resolve consumer complaints.

Attorney General King said, "It is only fair and right that Dell's customers will receive clear and adequate information that they can understand and count on, in order that they can make informed decisions. Dell consumers deserve full disclosure, particularly involving financing terms that may threaten consumer credit. More than the money, today's agreement provides profoundly important business reforms, which our strong coalition of states will closely monitor and enforce."

Specifically, today's agreement compels Dell to reform its business practices involving Dell credit accounts, warranties, rebates and customer service response. These reforms including the following:

  • Dell cannot report any late payments to collection agencies if a consumer has alleged that the debt is invalid and has offered documentation supporting his or her allegation.
  • Dell must mail rebate payments within a reasonable or specified time that is disclosed to the consumer. Where times are not specified, the rebate must be made within 30 days of receiving a properly completed request for a rebate.
  • Dell must provide the states with a proper mailing address, fax number, and email address to which consumer complaints may be forwarded, and respond to the states concerning complaints within 20 business days. Dell must maintain such complaints and responses for at least three years.
  • Dell cannot claim that it provides warranty or on-site repair or technical support service, unless it first clearly and conspicuously discloses that telephone-based troubleshooting or similar activity is required prior to such service. Dell must clearly explain what constitutes telephone-based troubleshooting or remote diagnoses.
  • For its Dell credit accounts, Dell must clearly disclose its credit terms, including that credit applications are for a revolving open credit account and that the range of APRs provided to consumers may increase or decrease, if such is the case. Dell must also disclose minimum monthly payment requirements, including the amount of such payment or the method of calculating the amount; the mode of calculating finance charges; and any and all penalties imposed for late and partial payments; and whether subsequent purchases using the Dell credit account will be subject to the same or different terms from any financing terms offered to the consumer pursuant to any financing promotions.