Dell faces accusations of knowingly selling faulty PCs

Lawsuit reveals signs of decline at computer maker, New York Times says

A lawsuit against Dell Inc. filed by a disgruntled customer is revealing a pattern of decline at the computer maker, according to a New York Times article.

According to a lawsuit filed by Advanced Internet Technologies, Dell knowingly sold PCs with capacitors that would leak and cause malfunctions.

In addition to the lawsuit, a Securities and Exchange Commission investigation, management changes, complaints of poor customer service, and other issues have plagued the company for the past seven years.

In the case of the faulty PCs, court documents claim Dell knew there were problems and tried to hide them from customers, including the federal government.

“They were fixing bad computers with bad computers and were misleading customers at the same time,” Ira Winkler, a former computer analyst at the National Security Agency and a technology consultant, told the New York Times. “They knew millions of computers would be out there causing inevitable damage and were not giving people an opportunity to fix that damage.”

Dell said the issue with the components, manufacturered by Nichicon, is "old news." In a statement, the company said, "The implication that this situation affects Dell currently is incorrect. The AIT lawsuit is three years old, and the Nichicon capacitors were used by Dell suppliers at certain times from 2003 to 2005."

The company has worked with customers to address the issues and extended warrranties to January 2008 on the motherboards of the OptiPlex computers impacted. The lawsuit also does not involve any current Dell products, the statement said.

"Faulty Nichicon capacitors affected many manufacturers. It is speculation to suggest that Dell was affected more than other companies," the company said. "Dell is responsive to customer issues and we continue to remain focused on our customers, their needs, and our growing record of superior customer service."

Dell is ranked No. 11 on Washington Technology's 2010 Top 100 list of the largest government contractors.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

Reader Comments

Fri, May 10, 2013

Does anyone remember the Sony batteries which were dumped into millions of laptops around the same time? Dell was the only company to actively seek out and replace each battery, where HP and IBM did nothing. AFAIK, Dell is plagued by problems passed down by their vendors, but they handle it much better than Dell's competitors. I think there is just a general decline in electronics quality across the globe. Dell is just the forefront of the sale, since they sell the packaged product. It's not their fault, and IMHO it's how you handle these problems that make you worth the money.

Mon, Aug 2, 2010 Josh

I was on the IT staff at the Naval War College in Rhode Island, had to replace many many motherboards in those OptiPlex 270s... but dell always worked with us. And warranty out from 05 to 08 is a lifetime, in computer years. It was a lot of extra work but we never had to pay a dime for the parts.

Tue, Jul 13, 2010 alex

Why is it that if you add a warranty upon ordering it will cost $119 for a 500 computer. But if you try to add the same warranty after ordering but before shipping it will cost approx $400. Thats a $300 increase and they havent even shipped the computer yet...Dell wont bend on this so why does them knowing about a warranty ahead of time change anything? Am I the only one who thinks this is problematic?

Thu, Jul 1, 2010 -gary Georgia

"Dell is responsive to customer issues and we continue to remain focused on our customers, their needs, and our growing record of superior customer service." If this were so, why do they have such a reputation for poor customer service? I have experienced their "responsive"ness and can tell you they are not at all responsive. If they have any kind of growing record, it is growing toward being the worst in the industry for customer service...and they have been trying for this record for many years. Wake up, Dell.

Thu, Jul 1, 2010 Ben Had

At least Dell gave a meaningful extended warranty... HP with their coconspirator NVidia put a meaningless 1 yr extension on the defective motherboard chipsets for their Pavilion series of notebooks. For those that were heavy users this meant that the chances of failure were increased adequately to get a replacement. For the occassional user? A $300+ repair bill.. That was an OUTRAGE.

Show All Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close
SEARCH
 Top 100 Slideshow
contracts DB

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Read More

  • Is SBA MIA on contractor fraud? Nick Wakeman

    Editor Nick Wakeman explores the puzzle of why SBA has been so silent on the latest contractor fraud scandal when it has been so quick to act in other cases. Read More

Webcasts