Dell Pays $3.85 Million To Make Legal Issues Go Bye Bye

Frequent readers of my blog will remember this story that I posted at the end of May of last year regarding accusations that Dell engaged in repeated false and deceptive advertising of its promotional credit financing and warranties. Well according to this story, Dell has settled the issue:

Dell said in a statement it will pay $3.85-million (U.S.) to at least 45 states participating in the settlement. A portion of the money will be used to reimburse states for legal costs.

But there’s more:

Under the terms of the settlement, Dell agreed to give customers more information up front about what kind of financing they qualify for and allow them to 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.

The settlement requires Dell to tell customers whether they must troubleshoot problems by phone before qualifying for in-person technical support at home. Dell must also justify claims about its customer service. For example, if it wants to use the term “award-winning,” it must have won a customer service award in the past 18 months.

So it looks like everybody is going to be happy. Consumers, Dell, and the 45 states who went after Dell. The only thing that bothers me is this comment from Dell:

In its statement, Dell said the states’ issues “represented only a very small percentage of the tens of millions of Dell consumer transactions in the states.”

That was the wrong answer back in May 2008, and it’s the wrong answer now. Why? Here’s what I said at the time:

It doesn’t matter how big or small the number of customers affected by this are. What matters is that Dell has a perception problem. The perception exists that Dell customer service has slipped. The perception is that Dell salespeople will say and do anything to get the sale. That’s a shame because Dell actually makes some good PCs. But that won’t matter if people won’t buy them because the perceive that Dell is going to screw them over. For customers perception = reality.

That was true then. It is true now.

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