Dell Sued for Deceivingly Low Improbable Financing

Dennis Faas's picture

Dell has come under fire once again -- this time, it's for misleading customers.

New York Attorney General Anthony Cuomo has filed a lawsuit against the company claiming that it misled customers on the financing arrangements of their purchases. (Source:

Specifically, the lawsuit accuses Dell and its Financial Services unit of deceiving customers with enticing financial offers which carried an abundance of restrictions and limitations. Cuomo said that consumers "who purchase Dell's products often find that many of the benefits and inducements featured in Dell's advertisements are illusory." (Source:

The lawsuit alleges that while Dell offers promotion such as a "no-interest" financing period, the company uses "ultra-restrictive underwriting guidelines" that prevent the vast majority of consumers, including those with excellent credit records, from qualifying.

The suit claims that Dell then proceeds to offer those who have been denied the promotional financing a regular plan in which consumers receive an open line of credit at interest rates that frequently exceed 20 percent. (Source:

Not surprisingly, Dell says that the company will "vigorously defend itself." A representative also stated that "our customers are our top priority at Dell... 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." (Source:

Unfortunately for Dell, this is not the first time that the company has had to deal with legal problems. In August 2006, the company announced that it would be undergoing an investigation by the US Securities and Exchange Commission and federal prosecutors.

Furthermore: this past March, Dell reported that an internal financing audit revealed evidence of misconduct, accounting errors and deficiencies in financial controls. (Source:

This newest lawsuit surely does not help the company improve its flailing image. While there may not be a such thing as good timing with lawsuits, Dell seems to hit the nail on the head with bad timing.

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