Dell faces a lawsuit from New York attorney general Andrew Cuomo, who charges that the beleaguered PC giant misled customers with deceptive financing offers. The suit is just the latest in a suddenly long string of bad news for Dell, which has relinquished its leadership role in the PC industry amidst a number of high profile scandals. Dell says its practices are both fair and appropriate and that the company will "vigorously" defend itself.
Consumers "who purchase Dell's products often find that many of the benefits and inducements featured in Dell's advertisements are illusory," the suit reads. According to the complaint, Dell uses "ultra-restrictive underwriting guidelines" for its financing programs, which prevents the vast majority of Dell's consumer customers from benefiting from the "no interest" financing that the company advertises. Most customers therefore receive standard Dell financing, which typically exceeds a 20 percent interest rate.
Dell says that customers are the top priority for the company and that it has never intentionally deceived consumers. "The allegations in the AG's filing are based upon a small fraction of Dell's consumer transactions in New York," a Dell spokesperson said.
Dell is under investigation by the US Securities and Exchange Commission (SEC) and federal prosecutors for past accounting practices. Last year, it surrendered its top spot in the PC industry to HP, let go its CEO, and returned company founder Michael Dell to that role. Since then, Mr. Dell has instituted major changes and undertaken a customer-focused feedback program. As a result of that program, Dell has opted to provide certain US-based consumer PCs with Ubuntu Linux.
