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Dell in hot water for deceptive advertising

Posted May 28 2008, 02:34 PM by Kim Peterson
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Dell had better make headlines with its earnings call tomorrow, if for no other reason than to bury the news out about its misleading advertising practices. A New York judge came down hard on the company yesterday for baiting customers with financing promotions that it never intended to actually offer.

Dell offered freebies and no-interest financing to "well qualified" or "best qualified" customers, according to the judge. But most customers who took the bait were given interest rates from 16% to 30%. The judge also faulted Dell for shoddy customer service that included long telephone holds and denying rebate requests. The judgment had little impact on Dell shares, which are up 3 cents today to $21.52.

Dell said it disagreed with the judge's decision, but hadn't decided whether to appeal. I think an appeal is unlikely; why would the company revive such a damaging case? The question now is if other states will follow New York in suing the company. New York's attorney general has received 1,000 complaints against Dell, and I'm sure other states are hearing from customers as well. (New York customers can apply for restitution at www.nyagdell.com).

On to the earnings report. Dell is in turnaround mode after a miserable year in 2007, when profits tumbled and revenue barely grew. Key to the turnaround is a new strategy to place Dell products in more stores here and overseas. Although Dell still lets people custom-order a PC, it's focusing more on pre-made models that it ships to stores. Dell is making solid inroads in Asia, getting its computers into electronics chains like Suning and Gome in China.

Analysts are expecting Dell to report a Q1 profit of 33 cents per share and revenue of $15.66 billion. At this time last year, Dell reported profit of 34 cents per share and $14.6 billion in revenue.

Dell shares have been creeping up in the last three months, and Morgan Stanley recently upped Dell's rating to overweight with a $28 price target.   

Update: Dell's Q1 results are in, and it looks like the company beat expectations. Revenue hit $16.1 billion, and profit was 38 cents per share. A highlight of the quarter: Notebook computer sales were up 43% from the year before. 

Additional reading:

Dude, did Dell finally score?

Dell moves away from build-your-own PC

Dell is so over the shopping mall

Dell disappoints again

Dude, you're getting a dud

Comments

 

Good!  Dell has finally gotten its comeuppance for playing it cheap and and treating the American consumer with contempt in terms of the most outrageously poor customer service and advertising that can kindly be described as deceptive.  I am sick and tired of dealing with tech support people half way around the world who don't get our language and who don't get our culture and who put you through the thrid degree just to confirm who you are and then, despite your protestations that always fall on deaf ears, go through the same automatonish checklist of troubleshooting items that the 18 previous non-English speaking tech support pinheads put you through over a period of endless hours while your blood slowly boiled in anger and frutration, with ultimately no positive outcome but perhaps, if you're lucky, a phone number to Microsoft because, after all, it's always the fault of the software manufacturer!  

We have traded in quality, worker pride,  and customer service for cheap prices and advertising gimmicks, and we as a nation are paying the price.  Perhaps those of my generation actually remember those days when you'd pull up to a service station to fill up at $.35 a gallon, and a neat looking, uniformed, courteous attendant would actually greet you and -- heaven forbid -- clean your windshield and check your oil, and even say "Thank you" before you pulled away.  It is this attitude of pride and customer service that is now only a memory in this country, and the sad loss of that desire for and interest in customer service, quality over cheap prices and marketing gimmicks, and pride in one's work that will render this great nation to the dog heap of history along with other once great societies that lost their way, unless we wake up and FAST!

RIP Dell!  I won't miss you when you're gone!

I made the mistake of buying a Dell in 2004. What I ended up with was an overpriced piece of junk. I have already had to replace the hard drive twice and the cd rom once.  And when you call tech support you get either India or Pakistan where no one speaks fluent english.  What a nightmare.  All I can say is, "Buyer beware and stay away from Dell."  Your better off with an E Machine at a fourth of the price.

I just bought a made to order Dell with a three year spyware/virus protection plan installed.  I was told the protection software was the 2008 version, its was not its 2006 and causes Vista to crash after connecting to the internet.  I did not recieve my computer until a week after I ordered it and did not find out what was going on for two weeks after that.  I tried to return the unopen CD and get my money back for it but after a week of customer service calls to India I was told I could not return it because it had been over 21 days since I ordered the computer.  I spent $1800 and wanted $35 back for the outdated software.  I will never buy from Dell again.

   I've been screwed by Dell as well with the bait and switch scam. I had bought one and helped with ordering three more, so with my last one for myself I bit on the "OFFER". Eighteen months interest free sounded good, so I signed up. Low and behold my first statement listed interest, I thought it was a mistake. I gave them a friendly call, no one seemed to be able to help me or listen. Not wanting a bad credit report, I paid up. My question is, where in North Carolina can I sign up for our own lawsuit?

Dude, you ARE getting a Dell.

I was a mis-led customer of Dell. I have excellent credit rating and was told by Dell salesman I would have free financing. When the bill arrived, Surprise!

I live in the state of Florida, Who can I complain to here?

I was a victim of this when I ordered my laptop.  The laptop is messing up and at 4 hrs. spending time on the phone trying to get the problem resolved each time, it just isn't worth it.  I think next time I will try an HP.

Not to mention that they don't stand by there product.  I purchased 8 plasma's for my sports bar and two have already gone out within 1 year.  They have refused to pay for it or replace it.  When I tried to take them to a TV repair they told me they couldn't even get the parts.

Dude I got "Dell'ed"

I have heard very little good about Dell Computer. Michael Dell raked in more than $153 million in compensation (for what?) last year, while his production teams continued to suffer the high cost of living in Austin and other high-tech centers. He abandoned some of his facilities in the United States and moved people abroad or simply left them to their own devices. And his products have never been known for exceptional quality and versatility. Maybe I am just jealous, but I cannot see what he has been doing to feather his nest all of the last 20 years as positive in terms of its impact on the American economy and the people he employs.

Too bad we the consumers cannot force them to admit anthing like when they "farmed " out all the service contract to India or Pakistan and none of the service techs speak english anymore or can even repair the computer you just purchased. I bought a Dell Dimension 8100 six years ago what a P.O.S. and a nightmare that was. Dell techs Crashed it three times into a boat anchor. I finally found a Canadian Tech who got it working after a fashion but could never repair all the damage done. Dell should be be burned to the ground and the ground salted.

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