Dell settles fraud case with $4m

A year after the state of New York won its case against Dell and Dell Financial Services, the company will now pay up.

The PC maker will pay out $4m to settle a case initially filed in 2007, New York's Office of the Attorney General said on Tuesday. The initial suit brought by Attorney General Andrew Cuomo accused Dell of fraud, false advertising, and deceptive business practices, including offering misleading financing, and failing to honour rebates, warranties, and service contracts.

Cuomo won the suit in May 2008, when the company was found guilty of the accusations listed above as well as "abusive debt collection practices".

His office released a statement on Tuesday saying that the $4m would be used to compensate customers who were affected by Dell's practices.

Besides the payout, the settlement requires that Dell changes its advertising, sales and financing practices. That includes making it clear to customers before purchase whether their warranty service contract is eligible for in-home service, and giving a percentage for how many people will qualify for an advertised promotional financing rate.

Original article: Dell to pay $4 million in fraud case from CNET News.com