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For immediate release -- Monday, Jan. 12, 2009.
Contact Bob Brammer -- 515-281-6699.

Dell Computers Making
Refunds to Consumers

Iowa consumers are eligible for up to a total of $25,000, under a 34-state agreement. Consumers need to file claims by April 13.

Des Moines. Dell Inc. will pay up to $25,000 in refunds to Iowa consumers as part of an agreement with 34 states regarding complaints from consumers who had problems with the computer company’s rebate offers, technical support, repair policies, and promotions for financing.

“Many of Dell’s practices must change, its customer service system must improve, and many customers will be eligible for refunds,” Iowa Attorney General Tom Miller said Monday.

The multi-state agreement resulted from consumer complaints about an array of issues, including customers applying for zero-percent financing but then being charged higher interest rates, customers having trouble obtaining warranty service on their Dell computers, and customers never receiving promised rebates.

Consumers must file refund claims postmarked by April 13, 2009. Nationwide, Dell agreed to pay $1.5 million in consumer restitution. In Iowa, refunds will total up to $25,000. Consumers may be eligible for refunds if they have a valid complaint addressed by the agreement concerning a product purchased between April 1, 2005, and April 13, 2009 , and if Dell owes them money.

The Iowa Attorney General’s Office has received 54 Dell complaints since April 1, 2005. Those consumers may be eligible for a refund under the agreement, and a claim form will be sent to them by the Office. Other Iowans who believe they may be eligible for refunds may download a claim form and instructions here. More information about eligibility requirements will be available by calling 888-777-4590 (toll-free long distance) or 515-281-5926. The deadline to file claims is April 13, 2009.

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More background and information:

Dell, Inc., based in Round Rock, TX, and its subsidiary, Dell Financial Services, LLC, reached the agreement with 34 state attorney general offices. Dell admitted no wrongdoing but agreed to pay $1.5 million in restitution to eligible consumers. Dell also is paying a total of $1.85 million to the states for legal costs and other expenses. Dell cooperated fully with the Attorneys General during their investigation.

The Attorney General Offices of Washington and Connecticut led the states’ effort. These states participated in the agreement with Dell, Inc.: AZ, AR, CA, CT, DE, FL, IL, IA, KY, LA, ME, MD, MA, MI, MS, MO, MT, NE, NV, NM, NC, OH, OK, OR, PA, RI, SC, SD, TN, UT, WA, WV, VT, and WI. The agreement is in the form of an “Assurance of Voluntary Compliance.”

It is not known yet how many consumers will be eligible for refunds. The amount of money issued to individual consumers will depend on the number of eligible recipients and the total amount claimed.

The agreement lists criteria for consumer restitution [see paragraph #36 of the Assurance]. To apply for restitution, consumers must submit a claim form by April 13 provided by the state Attorney General. The claim must concern a product or service purchased from Dell between April 1, 2005, and April 13, 2009. Consumers must have suffered a verifiable out-of-pocket monetary loss and must not have been compensated already for the loss. Claims must be for a consumer complaint about one of the following: a Dell “Conditional Financing Promotion”; a rebate the consumer applied for but did not receive; warranty service that Dell did not perform as promised or required by state implied warranty law; or extended warranty or next-business-day service that was not provided as promised. [Go to Dell Claim Form and instructions.]

The states said consumers complained about numerous practices. For example, one consumer said she made a purchase with zero-percent financing for 18 months and made her payments on time. But the last payment was applied late. The customer was then billed $668 interest for the entire financing period.

Under the settlement, Dell agreed to the following:

Financing and credit offers:

  • Dell will disclose in advertisements for promotional credit offers that the majority of consumers who apply won’t qualify for the best annual percentage rate (APR), and will disclose the range of initial APRs that consumers who are not considered the “most qualified borrowers” are likely to receive.

  • Dell will inform consumers considering applying for promotional financing that the application is for a revolving open credit account, that minimum monthly payments are required, and that approval of the account does not guarantee that the consumer will also qualify for conditional financing promotions (such as zero-percent interest for 90 days). Dell will explain how finance charges are calculated, disclose any penalties and inform the consumer whether subsequent purchases made using the credit account will be subject to the same or different financing terms.

  • At the time of credit acceptance, Dell will disclose whether the applicant has qualified for any conditional financing promotion.

Warranties and services:

  • Dell will fulfill its warranty obligations within 30 days from the date of notification or receipt of a defective product.

  • Dell will disclose whether phone-based troubleshooting or remote diagnosis is required before Dell will provide on-site repair or warranty-related service.

Rebates:

  • If a rebate is available, Dell will provide the necessary rebate documentation at the time the product is delivered or the service is provided.

  • Dell will mail rebates within the specified time-frame, or within 30 days if no date is specified.

Additional procedures and policies:

  • · Dell will implement written policies to ensure compliance with the settlement. Dell will substantiate any claims it makes about the quality of its customer service. Dell can use the term “award-winning” to describe it customer service only if the company received such an award with the past 18 months.

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