Dell Settles Finance Claims for $3.35 Mln

Dell has agreed to pay $3.35 million to settle 34 states' claims the computer makers financing, warranty, and rebate offers misled consumers.

Computer maker Dell has agreed to pay some $3.35 million to settle 34 states’ allegations that the company’s warranty, financing, and rebate offers were deceptive and misled consumers. The agreement has Dell paying $1.5 million into a restitution account; impacted consumers will be able to submit claims for compensation. The other $1.85 million will go towards the states’ legal costs.

“More than the money, this agreement provides profoundly important business practice reforms,” said Connecticut attorney general Richard Blumenthal, in a statement. “No more bait-and-switch financing—offers touting zero-interest that become surprise high-interest charges or astounding late penalties. Our strong coalition of states will closely monitor and enforce this agreement, which has been reached with Dell’s cooperation.”

The states’ complaint alleged Dell engaged in bait-and-switch advertising tactics, promising zero-percent financing which would be denied when consumers applied. The states also alleged consumers never received promised purchase rebates, and had difficulty obtaining warranty service on purchases.

Dell has always maintained that a very small number of consumers were impacted by the issues, and that most incidents were resolved before the states’ attorneys general launched their cases.

States participating in the settlement are Arizona, Arkansas, California, 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. Consumers in those states will have 90 days to submit their claims.

Notably missing? New York State, which launched its own suit in 2007 over allegations of bait-and-switch tactics and deceptive advertising.