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Lawsuit Shows Dell Hid Extent of Computer Flaws 272

Geoffrey.landis writes "According to an article in the New York Times, documents revealed in a lawsuit against Dell show that the computer maker hid the extent of possible damages due to a faulty capacitor in the computers it shipped from 2003 to 2005. Dell employees were told, 'Don't bring this to customer's attention proactively,' and 'emphasize uncertainty.' (PDF) 'As it tried to deal with the mounting issues, Dell began ranking customers by importance, putting first those who might move their accounts to another PC maker, followed by those who might curtail sales and giving the lowest priority to those who were bothered but still willing to stick with Dell.' In other words, the most loyal customers got the worst treatment."
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Lawsuit Shows Dell Hid Extent of Computer Flaws

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  • Ha (Score:5, Insightful)

    by mark72005 ( 1233572 ) on Friday November 19, 2010 @04:08PM (#34284948)
    This will surprise precisely no one who's ever done business with Dell.
  • Cover up by Dell? (Score:4, Insightful)

    by slack_justyb ( 862874 ) on Friday November 19, 2010 @04:10PM (#34284972)

    Wow who would have thought that some company in America was covering up, down playing, putting the blame on someone else, etc... on some bad news? Did anybody notice that the sky was blue today?!

  • by BoRegardless ( 721219 ) on Friday November 19, 2010 @04:16PM (#34285038)

    And take the lowest bidder from China...

    And outsource your inspection, testing and QC,...

    You deserve what you get. I am actually sorry to see this happen. I expected more professional management system.

  • And What About HP (Score:1, Insightful)

    by MightyMartian ( 840721 ) on Friday November 19, 2010 @04:18PM (#34285068) Journal

    Hopefully someone is going to be going after HP next.

  • by datapharmer ( 1099455 ) on Friday November 19, 2010 @04:23PM (#34285130) Homepage
    This isn't just capacitors. I almost stopped doing business with dell completely after a client came to me with a clearly failed nvidia chip on a model that had the warranty extended for just that problem. They had called dell during the warranty period and were told it was an issue with the OS and they needed to reinstall. They trusted dell. They reinstalled. They updated their firmware. The computer lasted another few months with the problem getting progressively worse until there was no video at all. I tested the system and determined definitively that it was the nvidia chip and asked dell to replace the board. I was given the runaround being told how do I know and its out of warranty. I pointed out that the warranty had been extended and my customer had called them during that timeline and was given bad information by their support team. They fought it and fought it and fought it some more until I called the rep that I do large orders with for corporate clients, and apologized to him that I would not be ordering anymore servers etc. from him. I explained the situation and was called back by dell corporate the next day offering to swap the bad board for a refurbished one. It solved the problem, but it really shouldn't have to go that far. I love using dell servers, but having experiences like that do not make me want to use their products.
  • by Angst Badger ( 8636 ) on Friday November 19, 2010 @04:29PM (#34285194)

    In other words, the most loyal customers got the worst treatment.

    Political parties do much the same thing. The so-called base voters who would never consider voting for the other party (or staying home) can be and generally are ignored by candidates because they know their votes are secure.

    Loyalty is a terrible position for a customer (or voter) to take. If you want results, insist on getting them up front, before you fork over the cash (or votes, or, in our political system, both).

  • Well, duh. (Score:5, Insightful)

    by blair1q ( 305137 ) on Friday November 19, 2010 @04:30PM (#34285210) Journal

    Of course they prioritized the situations with the most impact to them.

    What's wrong with that?

    However, selling computers with an enhanced probability of failure at the same price as if they didn't have that is fraud.

    And "reassurances that no data loss would occur when a PC failed" is just gob-smackingly stupid fraud.

  • by blair1q ( 305137 ) on Friday November 19, 2010 @04:31PM (#34285226) Journal

    But it did. Right after tens of thousands of customers got fucked by it and shareholders lost $300 million in equity.

    Now it's all better.

  • by bball99 ( 232214 ) on Friday November 19, 2010 @04:31PM (#34285232)

    i get the analogy, but dude, get a throwaway phone - lots cheaper and no contract... hope your dad is OK, btw

  • by CannonballHead ( 842625 ) on Friday November 19, 2010 @04:36PM (#34285280)

    Yes; what we need are government regulators that Dell can pay off so that these stories never actually make it out* and give buyers the opportunity to react with their wallets.

    Sarcasm aside: government regulation is good and helpful to a certain extent, but it doesn't solve all problems. Why? Because the government is made up of the same people that make up companies, and they can be bought, corrupted, and act unethically. And, unfortunately, we can't easily "boycott" the government, whereas we CAN refuse to buy Dell products, if we so desire.

    Unfortunately, I'm only a doomsayer, I don't have many good ideas in this way. I would like to say that I don't know many people who actually think there should be a 100% free market, just like I don't know many people who think we should have a 100% regulated market (i.e., no freedom in the market at all). Arguing against an exaggerated position of people who suppor ta "Free market" may not help much. Or, I may just be ignorant of the folks who actually advocate a 100% no-regulation-whatsoever market...

    * Because then a lawsuit against Dell would also involve the regulators and regulating governmental agency, which basically would mean that another group of people would be at risk and raise the incentive to hide the documents/defeat the lawsuit. Examples, perhaps? The recent coal mining stuff and BP. Those had government agencies attempting to regulate them and whatnot. Fancy that, the ones that were overseeing BP were corrupted. Shocking.

  • by Anonymous Coward on Friday November 19, 2010 @04:39PM (#34285314)

    Most North Koreans have never had a single problem with a computer.

  • Re:Oblig reference (Score:1, Insightful)

    by Anonymous Coward on Friday November 19, 2010 @04:53PM (#34285482) []

    It was more than just Dell having capacitor issues left and right.

    But most vendors didn't hide it to the extent that Dell did.

    Every company makes lemons from time to time; the better ones are those that admit it.

  • Re:Oblig reference (Score:5, Insightful)

    by DarthBart ( 640519 ) on Friday November 19, 2010 @04:59PM (#34285576)

    It not just "bad" caps. My 42" Samsung TV died, not because of defective caps in the power supply, but because the caps were inappropriately rated. They were 10V-rated caps in a 15V circuit. It was just only a matter of time before they died.

    And thankfully I found articles on the cap issues before I plunked down $999 for a new TV. $2 in caps, and 45 minutes of my time solved the issue.

    Well, $2 in caps, $23 in shit I didn't really need to cover minimum orders, and $20 in "overnight" shipping all because jASSper, TX was a shithole of a town and the local Ratshack doesn't carry anything but TV antennas and Verizon phones.

  • Re:Ha (Score:5, Insightful)

    by MaskedSlacker ( 911878 ) on Friday November 19, 2010 @05:01PM (#34285594)

    who's the idiot who doesn't want sustainable business? the guy that does shit customer service on his customers.

    The guy who's cashing his options at the end of the quarter and only needs the stock price to float until then.

  • Re:Ha (Score:5, Insightful)

    by gtall ( 79522 ) on Friday November 19, 2010 @05:02PM (#34285620)

    Calling any company is becoming a contact sport. I was informed by Verizon that my credit card number they had was expiring. So go to Verizon and try to log dice. They eliminated my login I've had for a few years. I recently got FIOS. So now I was invited to register. Hmmm...what's this? I must run Verizon's special piece of CrapWare on my Mac just to register for an account? No fucking way am I letting Verizon run anything on my machine. AT&T got a note from my credit card company and updated more fucking game Verizon throws at your head.

    What to do? Call Verizon...find all their numbers for this, that, and the other are connected up to the same damn phone bot. Try to navigate the phone menus, finally find a human who will hopefully take my new experi date . "Oh, that is a problem for our billing dept. Let me transfer you." "Uh, okay"....damn...back in phone menu hell right up at the top where I started. After 4 rounds of this, always reaching a different piece of proto-simian meat, I finally found a way to get to billing which seemed to surprise the billing person out of her nap. Finally fixed it. "Is there anything else I can do for you?" "No...NO NO NO...don't even think about it."

    Along the way, I was offered free movies for my FIOS for three months...I was "eligible". No way, I've been through that before with Verizon and FIOS. 3 phone calls later I finally got them to drop the damn movies after they started charging me, hoping to slip it onto the bill without my notice.

  • Re:Oblig reference (Score:5, Insightful)

    by allanw ( 842185 ) on Friday November 19, 2010 @05:13PM (#34285718)
    Use Digikey in the future. No minimum order and $3 shipping.
  • Re:Ha (Score:2, Insightful)

    by Anonymous Coward on Friday November 19, 2010 @05:14PM (#34285726)

    Welcome to modern capitalism. One reason of many I don't trust privatization of government functions.

  • by Myopic ( 18616 ) on Friday November 19, 2010 @06:09PM (#34286226)

    It's not a straw man. "Free market" has one meaning: a market with zero regulations. If libertarians don't want that, then they should stop saying "free market", and I really wish they would do that because it promotes ideology over moderation. If we drop the ideology that "regulations are bad", then we can get to the real adult work of deciding which regulations are net good and which ones are net bad. Do we have too many regulations today? or the wrong kind? Perhaps, but it's hard to discuss it because the ideologues are always ruining the conversation by shouting about free markets.

    But, libertarianism is an ideology. It can never be anything else. Libertarians will never change, but the moderate alternative is simply "conservative". I don't consider myself conservative in most regards, but at least they are realistic instead of ideological.

    Markets are good; free markets are bad. Moderation is good; ideology is bad.

  • by Anonymous Coward on Friday November 19, 2010 @06:18PM (#34286300)

    The captain of a ship is responsible for the performance and behavior of his crew.

  • by MightyMartian ( 840721 ) on Friday November 19, 2010 @06:18PM (#34286302) Journal

    I'm not exactly sure why I was modded troll for this. The problems that HP had with DV2xxx and DV6xxx notebooks, particular with the nVidia chipsets is well known, as is HP's refusal to properly deal with widespread issues of overheating and damage.

  • no soup for you (Score:3, Insightful)

    by epine ( 68316 ) on Friday November 19, 2010 @07:01PM (#34286812)

    They were simply trying to use up their spare parts inventory and string the customers along until they were out of warranty service contract. That's dishonest.

    Actually, I think from a legal perspective, Dell was colouring between the lines, if the contract was for Dell to replace the system as often as it failed within the warranty period.

    You might complain that it's not ethical given the business image that Dell put forward. Obviously they decided that their short term reputation with share holders was worth more than their long term reputation with customers.

    Given the size of the problem (across the industry) I'm not sure there were enough good capacitors available to replace all the defective boards with non-defective boards. I think it also took a while to figure out which capacitors were the good capacitors.

    Given the shortage and lead time, if you tell everyone about the problem up front, you're encouraging a run on a bank that's essentially insolvent.

    Suppose that Dell decides to man-up and announce a broad recall of millions of mainboards, but you're 18 months away from having enough replacement boards to go around. They could offer some kind of rebate to people electing to keep their could-blow-tomorrow systems. Many won't bite. You'll still have to pro-rate replacements. Dell's big dog accounts are going to expect the lion's share and you can't afford to make these people mad. If you say to every customer who purchased fewer than 100 systems "no soup for you" that's not going to play well in the echo chamber, either. Sounds like a PR fiasco at least equal to the sleazy approach they chose.

    OTOH, deciding to manage this by marooning thousands of busy technicians on phone lines to call centers in India with people pretending to comprehend English less well than they actually do is something the market should severely punish.

    I wish the suits so enamoured about dealing with big and established companies were the same people suffering telephone hell when big company doesn't man-up to their service contracts. Not that it would change how the world works all that much, but it might cut down on some of the intolerable bluster.

  • by ChrisMaple ( 607946 ) on Friday November 19, 2010 @08:24PM (#34287698)
    If you are working for the government, you are paid money taken from people under threat of imprisonment or murder if they do not give up their money. Such a job is inherently corrupt, and the persons who work such jobs are inescapably corrupt to the degree that they do not attempt to make their job permanently unnecessary, and when that happens, quit the job.

The party adjourned to a hot tub, yes. Fully clothed, I might add. -- IBM employee, testifying in California State Supreme Court