NY AG Sues Dell Over 'Bait and Switch'

The New York Attorney General's office sued computer maker Dell and subsidiary Dell Financial Services on Wednesday, accusing the company of "bait and switch" practices and poor customer service.

Andrew Cuomo said the state had received an "unprecedented number of complaints," totaling about 700. Most apparently revolved around Dell's financing practices.

Dell Financial Services has commonly been a target of customer ire, with its high interest rates and outsourced customer service. Several online consumer credit rights groups have cautioned members to steer clear of the company.

Cuomo's lawsuit alleges that the companies promised zero percent financing then change the rate to a higher one after the computer was purchased. As much as 85 percent of those who applied for credit never received that rate. Dell has denied any wrongdoing in the matter.

"We are confident that our practices will be found to be fair and appropriate," a Dell spokesperson said in a statement. "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."

The company says that it has sold some six million computers during the period the lawsuit covers -- 2003 and 2006, and has seen a 12 percent decline in complaints against Dell and 43 percent against Dell Financial Services with the Better Business Bureau.

Dell is also apparently conducting an audit of its own financial practices as well as a separate investigation by the Securities and Exchange Commission.