Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Dell Takes Page from Madoff Playbook


Brief scrutiny of today's headlines.

Bernard Madoff notwithstanding, defrauding consumers is not a viable business practice - an important lesson, to be sure, and one which Dell (DELL) has now learned the hard way.

The company will pay $3.9 million to settle a 46-state lawsuit that charges the PC-maker of defrauding consumers about financing terms, warranties and rebates - including a zero-percent financing offer that did not, strictly speaking, exist. Instead, customers found themselves barraged by high interest rates, hidden fees, and mysteriously voided warranties.

The company will also pay at least $1.5 million to compensate consumers, and $1.85 million to finance states' continuing investigations into Dell's business practices.

In a prepared statement, Connecticut Attorney General Richard Blumenthal said that an "epidemic-like wave of complaints" about Dell provoked him to launch a nationwide investigation in concert with other states' attorneys general.

Following the settlement, Blumenthal said, "More than the money, this agreement provides profoundly important business practice reforms."

What reforms, you may ask? Well, for example, the settlement stipulates that, in order to describe its customer service as "award-winning," Dell needs to have actually won such an award.

An outrageous requirement, to be sure.

Dell customers who bought a computer on or after April 1, 2005 can file a claim with their state attorney general within the next 90 days.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos