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N.Y. accuses Dell, unit of wrongdoing

Fraud, deceptive practices and false advertising alleged.

NEW YORK - New York Attorney General Andrew Cuomo accused Dell Inc. and its financial-services affiliate yesterday of "bait-and-switch" advertising and failing to deliver on promised customer service.

Cuomo announced details of a lawsuit filed a day earlier in state Supreme Court in Albany County, claiming that Dell and Dell Financial Services L.P. engaged in fraud, false advertising, and deceptive business practices.

The lawsuit accuses Dell, of Round Rock, Texas, of luring customers with zero-percent financing but, at the time of purchase, tricking them into higher interest rates, often without their knowledge.

Dell spokesman Bob Pearson said in a written statement that the company's conduct had been honorable.

"Our customers are our top priority at Dell," Pearson said. "We will vigorously defend ourselves in court. We are confident that our practices will be found to be fair and appropriate. While even one dissatisfied customer is too many, the allegations in the AG's filing are based upon a small fraction of Dell's consumer transactions in New York."

Cuomo said at a news conference yesterday that his office had "received an unprecedented number of complaints against Dell, approximately 700, and they keep coming."

While Dell frequently advertises zero-percent financing for computer purchases, the attorney general said that as many of 85 percent of those who applied did not receive that rate.

The lawsuit also claims that Dell sold plans for onsite computer repair, but failed to deliver, at times requiring customers to disassemble their own computers.

Jaqueline Scofield, 75, said she was outraged when she and her husband were told they would have to open the body of their computer.

"We're both not young. We both have arthritis in our knees. And to tell my husband to get down on the floor . . . I'll never buy another Dell," she said at Cuomo's Manhattan news conference.

The lawsuit seeks an order requiring Dell to pay unspecified damages to affected customers, a $500 payment to the state for each instance of some violations, and $2,000 for additional costs.