SEATTLE — Dell Inc. said Monday it has agreed to a legal settlement with states that claimed the computer company made misleading financing and service offers to PC buyers.
Dell will pay $3.85 million to at least 46 states, including Maine, participating in the settlement. A portion of the money will be used to reimburse states for legal costs, for which Maine is expected to receive $75,000.
Shares of Dell dropped 47 cents, or 4.2 percent, to close at $10.65.
Attorneys general from Connecticut and Washington, representing a much larger group of states, approached Dell with their concerns in the middle of 2008. In an interview, Connecticut Attorney General Richard Blumenthal said that an “epidemic-like wave of complaints” about Dell’s practices prompted him to contact his counterparts across the country.
Blumenthal said consumers who were offered zero percent financing later were ambushed by high interest rates and fees. Some people “faced unacceptable obstacles obtaining warranty service on their Dell computers and others said they never received promised rebates,” he added.
In a statement, Maine Attorney General Janet T. Mills said that “Dell and its subsidiary, Dell Financial Services, have taken unfair advantage of Maine consumers. Dell uses deceptive financing and rebate offers as enticements to buy, then they fail to fulfill warranty obligations. This settlement brings an end to these practices and provides relief to a number of consumers who purchased Dell products.”
Only one state, New York, has sued Dell over this issue so far. That case was filed in 2007, and last May, a New York state Supreme Court judge ruled against the computer company. Alex Detrick, a spokesman for the New York Attorney General’s Office, said the state and Dell are still wrangling over restitution and penalties.
Dell’s settlement Monday averted the possibility of a much larger lawsuit. Under the terms, Dell agreed to give customers more information up front about what kind of financing they qualify for and to let them cancel orders once they review final credit terms.
Dell also agreed to mail rebate payments and fulfill warranty obligations within a reasonable amount of time.
People who bought a computer or service on or after April 1, 2005, and had a problem with a financing offer, rebate or service can file a claim within 90 days with their state attorney general.
Maine residents who haven’t submitted complaints but believe they are eligible for refunds may obtain the claim form by downloading it from the attorney general’s Web site, www.maine.gov/ag, or by contacting the Consumer Protection Division at 626-8861 to leave a message requesting that a claim form be sent.