Cuomo: Lots of Dell users in NY are due compensation

Cary Lou Canfield has a nightmare computer repair story that is, unfortunately, all too familiar to many Dell customers. The White Plains, N.Y. resident paid $209 for an in-home service warranty when she bought her Dell computer several years ago. Six months after purchase, when the computer started exhibiting a "multitude of problems," she called the company's "800" service number and was connected to a representative in Mumbai. Thus began numerous, hour-long phone conversations in which she was asked to 1) turn off the power, 2) move the processor  3) pull off the back of the computer and 4) remove and replace memory sticks on her own. 

That $209 sure was paying for a lot of nothing. 

Eventually Dell dispatched a repair person to her home. That genius replaced a mother board and went away. The computer still didn't work, so Ms. Canfield finally took it to a local repair shop. The shop replaced a part that the Dell folks hadn't even diagnosed as a problem, and charged Ms. Canfield $100. The computer has worked well ever since.

"They should pay me for the in-home service plan because I did most of the work," she told a sympathetic crowd today at Consumers Union. 

As I listened to Canfield, I remembered my own frustrating experiences with a Dell technical service rep years ago. I knew I was in trouble when he asked me if I owned "a small screwdriver."

Fortunately, Canfield–and thousands of other Dell customers in New York–now have redress through their state attorney general's office. Today, New York Attorney General Andrew Cuomo spoke at Consumers Union, home of Consumer Reports, about a $4 million settlement with Dell Computer and Dell Financial Services intended to compensate New York residents harmed by Dell's fraud, false advertising, deceptive business practices, and abusive debt-collection practices.

He also intimated that other states might be initiating similar settlements soon, for the benefit of their residents.

Unfulfilled service is only one subject of the settlement; the other is falsely advertising that consumers would be eligible for "no-interest" and/or "no payment" financing promotions. "In practice, however, the vast majority of consumers, even those with very good credit scores, were denied these deals," Cuomo's office states. In a classic bait and switch scheme, Dell's finance arm offered financing that often exceeded 20 percent, but then failed to tell consumers that they hadn't qualified for the promotional terms, leaving them to finance their purchases at high rates. Here's more on the decision.

New York residents who think they've been wronged can go to www.nyagdell.com to get a copy of a claim form, and information on eligibility. The following New York residents may be eligible for money back from the Dell settlement:

•Consumers who financed their computers (and paid interest) after being led to believe that they had qualified for a no-interest promotion (e.g., 90 days, 6 months, 12 months);

•Consumers who did not receive promised rebates;

•Consumers who did not get promised next day/on site service under service contracts.

•Consumers who had difficulty getting Dell to make repairs that were covered by a Dell warranty or service contract. 

A Cuomo representative said that in the last scenario, consumers would be asked to describe their situation in their claim. But, he noted, "we're not going to require the kind of documentation that nobody keeps." 

Nonetheless, we stand by our advice that every time you speak with a customer-service representative, take notes on the interaction–including the time, date, name or employee number of the service rep, case number, and general content of the call. 

And if the rep asks you to get out your screwdriver, be very, very scared.–Tobie Stanger