Dell settles its fraud case with New York, will pay $4 million

By Scott M. Fulton, III September 16, 2009

It's a chapter from the dark side of Dell's history that you'd think it would have worked to put behind it sooner: Last year, a New York state court found Dell guilty of deceptive business conduct and misleading advertising. Specifically, Dell had offered "no interest" financing for customers, and then not only found ways to charge "non-qualifying" customers interest, but to use collection services to hassle customers who didn't think they owed it. It's taken nearly 16 months for Dell to come to any decision about how much restitution New York customers were owed. This morning, the state's Attorney General Andrew Cuomo announced that amount would be $4 million, which either suggests that fewer customers were "baited-and-switched" than was previously thought, or that Dell is getting off easy. "In a classic 'bait and switch' scheme, [Dell Financial Services] instead offered consumers financing at high interest rates, which often exceeded 20 percent," read this morning's statement from the A-G's office. "Dell and DFS frequently failed to clearly inform these consumers that they had not qualified for the promotional terms, leaving many to unwittingly finance their purchase at high interest rates."

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