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Dell to fork out $4m in fraud case

Erica Ogg CNET News

Published: 16 Sep 2009 10:20 BST

A year after the state of New York won its case against Dell and Dell Financial Services, the company will now pay up.

The PC maker will fork out over $4m (£2.4m) to settle a case initially filed in 2007, New York's Office of the Attorney General said Tuesday. The initial suit brought by attorney general Andrew Cuomo accused Dell of fraud, false advertising, and deceptive business practices, including offering misleading financing and failing to honour rebates, warranties and service contracts.

Cuomo won the suit in May 2008, when the company was found guilty of the accusations listed above as well as "abusive debt-collection practices".

On Tuesday Cuomo's office released a statement saying the $4m would be used to compensate customers who were affected by Dell's practices. Besides the payout, the settlement requires that Dell change its advertising, sales and financing practices.

That includes making it clear to customers before purchase whether their warranty service contract is eligible for in-home service, and giving a percentage for how many people will qualify for an advertised promotional financing rate.

Credit: Dell to pay $4 million in fraud case from CNET News