Dell sued for bait and switch ..

[canadateck]

http://money.cnn.com/2005/02/22/technology/dell_lawsuit.reut/index.htm?cnn=yes

NEW YORK (CNN/Money) - Dell Inc. is being sued for allegedly pushing consumers into high-interest financing schemes, as well as other aggressive sales practices, the plaintiff's law firm said Tuesday.

The suit accuses the world's largest personal computer maker of false advertising and bait-and-switch practices, fraud and deceit in its sales and advertising representations, and breach of contract by unilaterally modifying terms and conditions of sales and financing.

The suit was filed on Feb. 14 in San Francisco by Lerach Coughlin Stoia Geller Rudman & Robbins LLP.

The lawsuit can be broken down into two separate consumer rights violations, said Jeff Friedman, a lawyer with Lerach Coughlin.

First is the bait-and-switch accusation. A statement from the law firm given to Reuters said the suit was filed on behalf of a San Francisco nurse who claims that in 2003 she was led to believe that she was buying a Dell notebook computer listed at $599 and an $89 printer, but was later billed $1,352.

Dell is also accused of switching parts in the computers it sells. "The customer will order a computer with certain parts, but will not receive the machine they think they're getting," said Friedman. That includes installing lower end equipment in machines that a customer has been told will have better quality parts.

Second, the computer maker and its partners CIT Bank and Dell Financial Services (DFS) are accused of using false promises of low-cost financing to trick buyers with installment payment hikes.

"Dell promises 'easy' credit but no one qualifies. It then charges unconscionable high interest rates," Reed R. Kathrein, a Lerach partner who filed the suit, said in a statement.

At the urging of a Dell sales person, the nurse financed her purchase through DFS at an undisclosed interest rate that turned out to be 27.74 to 38.82 percent, the statement said.

"Customers are urged to finance their order through Dell and given special promotional offers like no payments for a year," said Friedman. "But they are told after the purchase is made that they don't qualify for the terms of the promotion and are stuck with higher rates and terms than what they had agreed to."

Dell (Research) could not be reached for comment.

The firm, known for its aggressive Silicon Valley securities class action lawsuits, is led by William Lerach, a lead player in many of the biggest shareholder class action suits of the past two decades.

[BJ_M]

gee whiz -- sounds just like the used car bussness ...


that legal firm is famous for class action suits - they start a new one at a rate of 1 a wek ..

[aanaravs]

Excellent!! I have had nothing but troubles with my Inspiron XPS, until last week. After 7 months, I can finally use my system.

[AlecWest]

Deja vu. Remember a few years ago when they were caught red-handed selling "new" monitors to people when they were really "refurbished" monitors??? And starting a couple of years ago, there were a spate of lawsuits about new vs. refurbished switcheroos.

But, it isn't just Dell. Further back, I remember when Gateway sold computers promising a 3-year onsite warranty. But, when customers had trouble and called up the service company, they were told, "Sorry, we define onsite as place of business and don't make in-home service calls."

As always, I'll continue to buy hardware locally ... from builders I know by name and reputation. Dell and Gateway systems might be cheaper, but there might be a good reason why they're cheap.

[BJ_M]

I must say though -- the DELL WOKSTATION line are real nice machines ... really well built and good value

[canadateck]

Those interest rates are crazy ,I saw a woman on the news the other day that bought one of those "Dollar A Day" computer's , she said with the Interest she will have to pay somthing like 7000$ for a 700$ computer, and it will take a few years to pay off. I always try to use cash unless I want the air mile , what I do is buy the thing then pay the credit card off at the ATM the same day.

[zzyzzx]

I have to wonder about someone who has to finance the purchase of a $700 computer. I mean if your finances are that bad, then don't buy one until you have the cash. It's called living within your means.

[Lucifers_Ghost]

Actually, those interest rates arent totally insane. I bought my living room set at Leon's (Im in Canada, dont know if its down in the USA or not). Anyway, I financed it. No payments for erm .. 18 months or so. And then once that term was up, the interest rate was 29.95%. It was paid off by then but still. Any company that sells merchandise that you can finance and uses a finance company that ISNT a bank, is going to have those insane interest rates. At least, here in Canada anyway. I dont know what the US is like for stuff like that.

LG

[BJ_M]

leons finance = Beneficial Finance/Household Finance i think ...

their intrest rates go to 33% ... you think thats bad , do one of those payday cash advances and the effective intrest rate (apr) is equal to 500%


many credit cards are in the 24-30% range ..
as are many dept. store cards ..


never never get into that rut using that stuff -- or it can bury you ...

[hech54]

ALOT of places do that....financing through Beneficial....nothing new. I suspect this law firm chose the company with the most money and highest brand name recognition to try to bleed free money from.
My Dell has been a faithful servant for many years now.

[smearbrick1]

I have to agree with some of the accusations. I hate those ads for computers for 499.00 w/ free this or that. Then, when you check the website, it lists the computer starting at 499.00 but you can never get it at that exact price. When you go to check out, it automatically changes the price to include some piece of bullshit software or hardware crap that jacks the price up to 600.00. When I bought my Dell, I was very careful about what I selected and didn't select. I also found every possible coupon code for free shipping (2 day I might add) and 20% any dimension over 1000.00. Some how I was also able to combine the 20% coupon with a 10% coupon and got a ridiculously cheap Dimension 8400. Anyway, I don't think most consumers are that aware of what they are buying and when. It's like when Dell uses that "Recommended for students" line... why do they recommend XP Pro for students over XP home. Also, "Dell recommends 1 gb of RAM". Of course they do, you would to if you were trying to jack up the price of someone's pc in hopes they were going to pay for it using your financing.