NY Judge Finds Dell Engaged In Deceptive Practices

(Adds comment from Attorney General Andrew Cuomo, comment from Dell spokesman beginning in fifth paragraph.)

By Chad Bray

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- A state judge in Albany has found that Dell Inc. (DELL) and its financing arm engaged in deceptive business practices related to financing promotions for its computers and technical support.

In a decision dated Friday and released Tuesday, New York State Supreme Court Justice Joseph C. Teresi in Albany ruled that Dell engaged in deceptive practices regarding its advertisement of attractive financing terms to purchase computers, its advertising of technical support that purchasers were entitled to under their warranties and administration of its rebate program.

"Dell has 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," the judge wrote.

New York Attorney General Andrew Cuomo sued Dell and its Dell Financial Services LP unit last year, alleging the computer maker deceived customers in order to increase its computer sales.

"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," Cuomo said in a statement Tuesday. "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."

The judge will hold further proceedings to determine what restitution New York consumers might be entitled to.

"We don't agree with this decision and will be defending our position vigorously," said Jess Blackburn, a Dell spokesman, in a statement. "Our goal has been, and continues to be, to provide the best customer experience possible. We are confident that when the proceedings are finally completed the court will determine that only a relatively small number of customers have been affected."

Shares of Dell closed up 30 cents, or 1.4% to $21.49 Tuesday and after hours were recently trading up three cents.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com

  (END) Dow Jones Newswires  05-27-08 1715ET
Copyright (c) 2008 Dow Jones & Company, Inc.

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