Hood Announces $3.35 Million Settlement with Dell

[Verbatim release] Jackson, MS--Attorney General Jim Hood announced today an agreement between the Attorneys General of 34 states and Dell under which Dell will provide $1.5 million restitution to Dell customers who experienced problems with the company's financing promotions, rebate offers, technical support and repair policies. Under the agreement, Texas-based Dell, Inc., and its subsidiary, Dell Financial Services, LLC, admit no wrongdoing ,but agree to pay restitution to eligible consumers who file claims postmarked by April 13, 2009. Dell will pay an additional $1.85 million to the states for reimbursement of legal costs and other expenses. Mississippi will receive $46,666.67 of that amount.

Mississippi, along with thirty-three other states, investigated Dell's sales practices after customers complained about an array of issues. Some applied for zero-percent financing then were charged higher interest rates. Others had trouble obtaining warranty service on their Dell computers. Many said they never received promised rebates.

Under the settlement, Dell, who cooperated fully with the Attorneys General during their investigation, agreed to the following:

FINANCING AND CREDIT OFFERS

· Disclose in advertisements for promotional credit offers that the majority of consumers who apply will not qualify for the best annual percentage rate (APR), and disclose the initial APRs that would apply when a consumer is not considered the "most qualified borrower."
· Inform consumers considering applying for promotional financing that the application is for a revolving open credit account, that minimum monthly payments are required and that approval of the account does not guarantee the consumer will also qualify for conditional financing promotions (such as zero-percent interest for 90 days). Explain finance charge calculations, disclose penalties and inform the consumer whether additional purchases made using the credit account would be subject to the same or different financing terms.
· At the time of credit acceptance, disclose whether the applicant has qualified for any conditional financing promotion.

WARRANTIES AND SERVICES

· Fulfill its warranty obligations within 30 days from the date of notification or receipt of a defective product.
· Disclose whether phone-based troubleshooting or remote diagnosis is required before Dell will provide on-site repair or warranty-related service.

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REBATES

· If a rebate is available, provide the necessary rebate documentation at the time product is delivered or the service is provided.
· Mail rebates within the specified time frame, or within 30 days if no date is specified.

ADDITIONAL PROCEDURES AND POLICIES

· Implement written policies to ensure compliance with the settlement on issues relating to consumers's rights to cancel orders; company return policy for products purchased with credit; accurate reporting of information to credit-reporting bureaus and, the removal of consumer accounts from collection agencies.
· Substantiate any claims Dell makes about the quality of its customer service. Dell can use the term "award-winning" to describe its customer service only if the company received such an award within the past 18 months.

CONSUMER REFUND REQUESTS:

It's not yet known how many consumers in Mississippi or nationwide may be entitled to refunds under the settlement. The amount of money issued to individual consumers depends on the number of eligible recipients and the total amount claimed. Consumers may be eligible for restitution if 1) They have a valid complaint concerning a product that was purchased between April 1, 2005, and April 13, 2009, and is addressed by the agreement and 2) Dell owes them money. Mississippi residents who have not previously filed a complaint with the Attorney General's Office and who believe they are eligible for refunds should make a request by downloading a claim form at http://www.agjimhood.com. Consumers can also call 1-800-281-4418 or 601-359-4230 between 10 a.m. and 3 p.m. weekdays to request a form by mail. Residents who previously filed complaints with the Attorney General's Office after April 1, 2005, will be mailed claim forms. However, said consumers who believe they are eligible and do not receive a claim form within two weeks of today's date, should download one from the Attorney General' s website (http://www.agjimhood.com ) or contact the Attorney General's Office for a claim form. The deadline to submit claims is April 13, 2009.

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