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Dell to pay $4M to state for misleading ad claims

Thu, Sep 17th 2009 12:00 am
New York Attorney General Andrew Cuomo said Tuesday that Dell Inc. and a subsidiary have agreed to pay $4 million to resolve charges of fraudulent and deceptive business practices impacting consumers across the state.

The settlement, which also involves Dell Financial Services, follows a decision in New York Supreme Court in Albany County that backed Cuomo's claims that Dell had engaged in fraud, false advertising, deceptive business practices, and abusive debt-collection practices. The AG filed a lawsuit that accused Dell of engaging in bait-and-switch advertising with respect to its "no interest" financing promotions. Those ads misled consumers to believe they had qualified for promotional financing, the AG said, failed to adequately disclose the terms of its "next day" service contracts and failed to provide consumers with warranty service and promised rebates.

Along with the $4 million in restitution, penalties and fees, the settlement also requires Dell to make sweeping changes to its advertising, sales and financing practices, a release from Cuomo's office stated. The company did not admit any wrongdoing.