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Dell sued over fraud allegations

Tags:
Class Action,
Lerach Coughlin Stoia Geller Rudman & Robbins

John G. Spooner and Alorie Gilbert CNET News

Published: 24 Feb 2005 14:00 GMT

A California law firm has slapped Dell with a class action lawsuit charging the computer giant with "systematically deceiving" its customers.

The suit, filed in San Francisco County Superior Court on 14 February, seeks class action status in California and accuses Dell of "bait and switch" practices, false advertising, fraud and deceit in sales and advertising, and breach of contract. The law firm behind the suit, Lerach Coughlin Stoia Geller Rudman & Robbins, publicised it on Wednesday.

The case centres on the allegation that Dell advertises low prices for its computers, but people who try to purchase a machine at the advertised price find it's no longer available for that price. Often those customers wind up with another computer, the suit said.

One plaintiff is a San Francisco nurse who said she bought a Dell notebook computer listed at $599 along with an $89 printer, but was billed $1,352 for her order. Another plaintiff said Dell shipped him products of lower quality than the ones he had ordered from the company's Web site. The Round Rock, Texas-based PC maker then resisted his efforts to resolve the problem, he said.

The suit also said that Dell and its lending partner CIT Bank change without notice financing packages promoted as "easy" and "preferred", to include much higher interest rates and hidden charges.

Lerach Coughlin Stoia said on Wednesday that it has reviewed hundreds of complaints.

"We got quite a few complaints. We also saw quite a few complaints online," said Reed Kathrein, an attorney at the law firm. "The theme appears to be a bait and switch, where what Dell does is attracts you with one ad and then substitutes."

A Dell representative declined to comment, saying the PC company does not publicly discuss pending litigation.

Dell sells more personal computers than any other provider on the globe, and it's on a growth spurt. The company, which increased shipments by close to 20 percent in its most recent fiscal quarter, expects to rake in nearly $60bn in revenue this year.

The suit alleges that Dell has violated numerous California laws and codes of conduct, including the California Consumer Legal Remedies Act, the California Business and Professions Code and the Untruth Act.