Two Dell customers in California have filed class-action lawsuits against the company for what their lawyers call bait-and-switch marketing tactics.

Lawyers from Lerach Coughlin Stoia Geller Rudman & Robbins filed a class action suit on Feb. 14 in Superior Court for San Francisco County against Dell, Dells financial services division (DFS) and its finance partner, CIT Bank, on behalf of Dell customers.

Dell offers one low-priced product and then substitutes a higher cost or lower quality item, Reed Kathrein, a Lerach partner whose firm is best known for filing stockholder lawsuits, said in a statement. Dell promises easy credit but no one qualifies. It then charges unconscionable high interest and other credit charges.

Kathrein told internetnews.com that Dell responded to the law firms initial letter but could not confirm if Dell has seen the legal filing. He also said his office had received close to 100 complaints since August 2004.

We received too many complaints to ignore, Kathrein said.

Dell spokesman Lionel Menchaca said the company would not comment on pending litigation.

In Webers case, the San Francisco nurse told lawyers she had limited experience with computers when she responded in 2003 to a Dell ad and bought a notebook computer listed at $599, along with an $89 printer. She was billed $1,352 for her order and, at the urging of Dells sales person, financed her purchase through DFS at an undisclosed interest rate that turned out to be between 27 and 39 percent.

Holtzman told his lawyers he responded to a Dell e-mail offer by ordering computer products at Dells online store. He received a confirmation of his order and billing rate, but the products that arrived were of a lesser quality. Efforts to reach Dell and resolve the matter were frustrating and unsuccessful.

Lawyers at Lerach claim that because Dell equipment and services are sold exclusively by telephone and through Dells Web site, their customers can view only pictures of the products prior to sale -- never the product itself.

In 2004, Dell spent $300 million advertising its products on television, in newspapers and catalogues and on the Internet. It shipped 5.4 million personal computers in the United States and generated $6 billion in revenue from U.S. consumers that year.

Knowing that these consumers are not sophisticated, Dell nonetheless inundates them with a dizzying array of advertisements for Dell products, the complaint says. While the names of the computers, model numbers and pictures are usually consistent, the details of Dell offers vary from one ad to another and even from day to day or hour to hour, with small print disclaimers, the suit charges.

The class action applies only to California residents. A Proof Of Service document is due by April 15, 2005, with a case management statement due on June 30. The first case management conference is scheduled for July 15.


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