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http://www.bloggingstocks.com/2008/05/28/dell-found-guilty-of-fraudulent-advertising/
Dell found guilty of fraudulent advertising
Filed under: Law, Dell , Marketing and advertising, Scandals
Dell
is known for its terrific customer service and catchy ads but the New
York State Supreme Court has found that some of those ads were
fraudulent and misleading.Judge Joseph Teresi wrote that the company
“engaged in repeated misleading, deceptive and unlawful business
conduct, including false and deceptive advertising of financing
promotions and the terms of warranties, fraudulent, misleading and
deceptive practices in credit financing and failure to provide warranty
service and rebates.”Dell will be prohibited from engaging in
such conduct in the future and may also have to pay an as yet
undetermined amount of restitution to consumers.A lawsuit filed by New
York Attorney General Andrew Cuomo alleged that the company’s ads
falsely led consumers to believe that they qualified for low- or
no-interest financing when, in reality, many consumers didn’t.
Following the ruling, Cuomo said that, “For too long at Dell the
promise of customer service was a bait and switch that left thousands
of people paying for essentially no service at all. We have won an
important victory that will force Dell to live up to its
responsibilities and pay back its customers for profits that were
pocketed but not deserved. This decision sends an important message
that all corporations will be held accountable for the promises they
make to consumers.”Dell says it’s confident that only a small number of
customers were effected — the company’s latest 10-K does not
specifically refer to this risk factor, which indicates that the
company does not believe the damages could be material. The market
seems to agree, with shares of Dell flat on the news.
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