updated 12:35 pm EDT, Wed May 16, 2007
Dell Fraud Lawsuit
Dell may be guilty of committing fraud against its customers, according to a lawsuit filed yesterday by New York's government. Attorney General Andrew Cuomo's suit alleges that the system builder's financial branch misled buyers, promising relatively inexpensive financing plans but then turning back on guarantees and support contracts, leaving users stranded when their systems break. The state attorney would force an end to the reported fraud through an injunction against Dell's methods and would also obtain damages for every customer affected.
Dell for its part has denied the claims, saying that its method is fundamentally honest and that it would fight the suit in court.
"We are confident that our practices will be found to be fair and appropriate," said Dell's spokesman Bob Pearson. "While even one dissatisfied customer is too many, the allegations in the AG's filing are based upon a small fraction of Dell's consumer transactions in New York."
The suit marks one of many problems for the increasingly strained company, which has had to deal with allegations of illegal accounting as well as losing ground to its arch-rival HP in the US.