The suit will reportedly focus on allegations that Dell misled
customers over its sales practices, failed to pay promised rebates
and did not honour promised warranties and service contracts.
Reports suggest that the suit will claim that Dell Financial
Services, which is a joint venture between the computer firm and
CIT Bank, attracts potential customers with the promise of interest
free loans. It then denies those loans to up to 85% of applicants,
offering them loans at interest rates of up to 16%.
"While even one dissatisfied customer is too many, the
allegations in the filing are based upon a small fraction of Dell's
consumer transactions in New York," said a Dell statement. "We are
confident that our practices will be found to be fair and
appropriate."
The suit seeks unspecified damages and an injunction against the
allegedly offending practices. It is expected to say that when
customers attempt to obtain rebates and are sent from one telephone
operator to another in a "runaround" which leaves them unable to
receive the promised benefit.
Dell is already under regulatory pressure, with the financial
regulator the Securities and Exchange Commission investigating its
accounting practices. The company's own investigation admitted that
it had found errors and evidence of misconduct in its financial
results.
Earlier this year Dell's chief executive Kevin Rollins resigned
to be replaced by company founder Michael Dell. The company had
fallen behind Hewlett-Packard in numbers of PCs shipped in the US,
according to figures from research firm IDC.
