New York Judge Finds Dell Guilty

American hardware and technology manufacturer Dell was found guilty by a New York judge of engaging in deceptive advertising in promotional credit and warranty offers. Yesterday, judge Joseph Teresi ruled that the company and its affiliate Dell Financial Services have to pay restitution for engaging in fraud, false advertising and deceptive business practices, along with abusive debt collection.

The American company has been brought to court by New York's 64th State Attorney General last year, on the claims that Dell engaged in "bait-and-switch" advertising. Andrew Cuomo who, prior to his current position had been Secretary of Housing and Urban Development, declared last year that "Dell's consumers were intentionally misled, and they had to pay for that privilege. I hope this lawsuit sends a message to companies large and small that delivering a product is simply not enough - the promises they make must be delivered as well."

According to yesterday's ruling by Teresi, Dell lured customers into buying its products with advertisements that promised "no payment" or "no interest" financing. But it appears that the vast majority of applicant customers couldn't benefit from the advertised deals and were offered financing with higher interest rates. Moreover, applicants with strong credit scores were also refused the advertised financing. The New York judge also ruled that Dell deliberately attempted to deny its customers of technical support and warranty service, failing to live up to its onsite repair promises.

According to the Teresi decision "Dell has engaged in repeated misleading, deceptive, and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates."

The New York judge is expected to hold additional proceedings to determine the amount of restitution and penalties Dell will have to pay its New York customers. In the meantime, Dell has to present the court with the number of applicants who are likely to benefit from the promotional financing. Dell has not yet commented on the ruling.