Are dell being illegal?
November 22, 2005 5:17 PM   Subscribe

DellHellfilter: Dell are telling my sister that if she doesn't sign the contract they sent her for a new computer her credit rating will be affected and she won't be able to get credit for anything again. This can't possibly be true, can it?

After weeks of Dell being incompent and habitually lying to me the phone (example:
Dell bloke: "since you are buying on credit you have to take the extended warranty at £phenomenol cost."

Me: "Really?"

Dell bloke: "Yes. It's company policy."

Me: "I really don't want it. If that's the case I'll just leave it."

Dell bloke: "Okay, I'll put the deal through without it.")

they sent a contract to my sister (who agreed to pay for the system on credit, as a kind of loan, bless her). I then found a better computer for a similar price elsewhere and - since Dell were being awful anyway - decided to buy this other system, without - importantly - signing (or having my sister sign) the contract Dell sent.

She got a phone call today in which two seperate people told her that if she didn't sign the contract and buy the computer her credit rating will be affected and she won't be able to buy anything on credit again. She is now very worried.

But this can't possibly be the case, can it?
posted by Little Bravado to Work & Money (29 answers total)
If you are in the USA, calling your state's Attorney General's office can probably clarify the issue for you (and maybe they'll even breathe down Dell's neck a bit if they're being bad).
posted by winston at 5:28 PM on November 22, 2005

It sounds like a scam, but I'm a little unclear. You have possession of the computer that hasn't yet been paid for, and you don't want to sign some contract. Will you be returning the computer?

Or, you don't even have a computer, and you haven't paid either, and all you have is a contract they want you to sign. In this case, do nothing.
posted by odinsdream at 5:29 PM on November 22, 2005

No, sorry, I should have made that clearer. We didn't buy any computer -at all - from Dell, but bought from another company. When Dell phoned my sister told them she wouldn't be signing the contract, as she didn't want the computer. They then said she had to sign the contract or it would affect her credit rating .

I'm in the UK.
posted by Little Bravado at 5:34 PM on November 22, 2005

So did she verbally accept the offer? Did she (or you) behave in any other way to indicate that you accepted the offer? What was the delay between "acceptance" and "revocation", two days? Two weeks? What is the total value of the transaction? Are they telling you you must sign the contract for the computer, the warranty or both?

In Canada at least, even if something is put on your credit file, you can file a dispute explaining the incident. Make sure you understand how credit works in your jurisdiction, it's usually not as simple as a "rating".
posted by loquax at 5:44 PM on November 22, 2005

They're lying. Dell is under a class-action lawsuit for using bait & switch tactics, and if you poke around the internet you'll find plenty of examples of their dishonesty easily.

It doesn't seem to me like she's gotten any product or official "promise of product", so she doesn't owe any money, so there's nothing that should affect her credit rating. There is no order in place, and even if there was, you should be able to cancel it. It shouldn't matter that you're in the UK; whomever you talk to is prolly in India anyway.

Call, ask for a supervisor, and get them to leave you alone. Be polite, then be rude; whatever gets them to leave you alone. And if they're going to lie and bully, you can too : "I have eighty lawyers and when we're done with you your contract will be pushed so far up your ass you'll be able to read it from the inner side of your eyeballs."
posted by neda at 5:49 PM on November 22, 2005

I don't know anything about UK law, but it sounds like the dell dude is lying.

1. If your sister HAD signed a contract, dell could hold her liable for violating the contract.
2. Your sister did NOT sign a contract, so she can't be under any obligation to dell.
3. If Dell can put your sister under obligation, the what stops your sister from yelling at the top of her lungs, in downtown London "EVERYONE THAT HEARS THIS NOW OWES ME 4000 (euros, pounds, dollars, whatever)" and then proceed to file claims against them.
4. If the dell dude doesn't have any personal info about your sister, how would they file a bad credit notice (personal ID number, credit card numbre, bank number, etc.)
5. Verbal contracts are worth the paper they are printed on. Given the UK's history of economic innovation, it seems highly unlikely that verbal contracts are binding (ie, your sister saying over the phone that she wants the computer).
6. A dell manager, at some level, wants to hear about this. Some low-level sales manager may be pushing dirty policies like this, but it will ultimately hurt dell's reputation. Try calling back and asking for a customer service manager. Once you get one, explain the situation.

This is very bad business on the dell rep's part, but don't let it get you (or your sister) angry. Fear and anger are the tools this guy is trying to use to control you.
posted by b1tr0t at 5:50 PM on November 22, 2005

I come to this opinion unencumbered by any actual knowledge of UK contract law, but it strikes me that even if she made an oral agreement to buy the system it's not a completed contract since they required her to then sign some paperwork, meaning the deal is not in fact completed. If the paperwork is a credit application then I don't see how they could even claim oral contract.
posted by phearlez at 5:55 PM on November 22, 2005

Dell are telling my sister that if she doesn't sign the contract they sent her for a new computer her credit rating will be affected and she won't be able to get credit for anything again. This can't possibly be true, can it?

I'm only familiar with the US credit system, but here it wouldn't be true. I doubt it would be true in the UK either, but I'm not sure. You might want to contact a local lawyer.

There are two things that get reported on credit reports.

1) all your credit accounts, and wether or not you've made payments on time.

2) any delinquent accounts.

It's not clear to me how not signing a contract would fall under either one of those categories. As long as you make your payments on time, then they'll have nothing to report on you.

The problem is, unfortunately there is nothing stopping Dell, or any other company from making up charges that they feel they are owed, and then simply reporting that those bills are unpaid. Dell could decide, unilaterally that they think you owe them $X and report that. Credit reporting agencies don't really do any checking, they are very lazy.

After that (in the US at least), it's up to you to dispute the claim, which is actually pretty easy. All you have to do send a letter to the credit reporting agency, claming that you don't owe the money. Once you do that, the credit reporting agency is required to investigate the claim, and they'll have to ask Dell for some corroborating evidence and so forth. If you keep fighting it through the credit reporting agency, then ultimately Dell will need to get a legal judgment against you for the claim to be reflected in your credit.

also they're being a little over the top in claiming you'll never be able to buy anything again. Your sister's credit score will go down if you can't fight off the claim, but not to the point where she won't be able to buy anything again.
posted by Paris Hilton at 5:57 PM on November 22, 2005

1. If your sister HAD signed a contract, dell could hold her liable for violating the contract.
2. Your sister did NOT sign a contract, so she can't be under any obligation to dell.

Unless there are specific statutes requiring a signature in such a case (which I doubt there are), behaviour can be interpreted as acceptance of an offer, without a signature. That would include verbal communication, sending your information to them to begin processing, faxing them ID, whatever. Not saying a court would neccessarily agree, but it's not as cut and dry as whether or not you physically signed anything. I would agree with the advice to speak to a manager, write letters to Mike Dell, whatever. I can't believe this will be a problem for you if you complain enough.

phearlez - the credit contract could be a collateral contract, having nothing to do with the contract for purchase of the computer, which would not have the same acceptance requirements as a credit extension (barring any laws I am unaware of in the UK).
posted by loquax at 5:58 PM on November 22, 2005

By the way, have they sent your sister a computer? I was under the impression that they'd sent her a box. If they haven't sent her a box yet, then you owe them absolutely nothing, and should simply cut off communication with them.

It also sounds like what their doing is extortion. Claming that if you don't do something, they'll ruin your credit...
posted by Paris Hilton at 5:59 PM on November 22, 2005

I'm not a UK solicitor, but I'll eat my hat (without salsa or anything) if the threats have any basis in reality.

In the United States, this type of behavior is generally squashed by class-action lawsuits.
posted by I Love Tacos at 6:13 PM on November 22, 2005

If it was on the phone or online, you have a 14-day cooling off period for *any* purchases. If you changed your mind in that time, just tell them you changed your mind during the cooling-off period, and the magic words should make them go away. It's your statutory right.

If it was longer than 14 days, you're in a spot, because they will doubtless put some sort of mark on your credit report about it. If they do, just write to Equifax and Experian, get your credit reports and get a note put on the file. You can't get "blacklisted" for credit in the UK over one thing, not like that. It's all done by scoring.

And finally, tell Trading Standards, they'll be interested in something like this.
posted by bonaldi at 6:13 PM on November 22, 2005

They're lying, this is a high-pressure sales tactic.
posted by evariste at 6:22 PM on November 22, 2005

Your sister did NOT sign a contract, so she can't be under any obligation to dell.
That is simply not true (in Canadian, and I would think British law). If she engaged in a verbal agreement to buy the computer, she can be held to it.
Though no sane retailer would. This sounds like a misunderstanding to me.
posted by Count Ziggurat at 6:35 PM on November 22, 2005

That is simply not true (in Canadian, and I would think British law).

How do you prove the existence or non-existence of a verbal contract?
posted by b1tr0t at 7:06 PM on November 22, 2005

How do you prove the existence or non-existence of a verbal contract?

Very easily, if Dell happens to record these calls.
posted by IshmaelGraves at 7:21 PM on November 22, 2005

How do you prove the existence or non-existence of a verbal contract?

Judicial discretion on the basis of the credibility of the parties and any other relevant actions on the part of those agreeing.

Given the circumstances, is it reasonable or unreasonable to believe that you verbally or otherwise agreed to a contract as alleged by Dell?

Not that this is make or break, given the rest of the facts of your situation, but that's how a court would look at whether or not a contract has been agreed upon if there is no signature or explicit written agreement.
posted by loquax at 7:26 PM on November 22, 2005

How do you prove the existence or non-existence of a verbal contract?

If it was an agreement made to someone from a call centre, then it is almost sure the call was recorded. If they didn't tell you this then it may have been illegal to record the call (in which case it isn't admissible in court) but every state / country has different rules on this (in Canada it is NOT illegal to record a call as long as one party consents, for example).

All that being said, many places have a cooling off period during which you can decide you are not interested in an offer you accepted on the phone.

Personally, I'd start to get picky with the contract. Try to remember what they told you on the phone, I bet you it was very simple, something like:

"Thanks for your order. We will send the Dell SuperComputerModel 4000 to you tomorrow for just 10 payments of $399.99"

And I bet your contract has a lot more on it than that (especially since you're saying "contract"...). You could consider crossing out every single thing on the contract that was not discussed on the phone, then sending it back, stating that you did not agree to any of those terms and you would like a custom contract that only states the terms you agreed to on the phone. It's unlikely Dell will want to call their lawyers to get one printed up, and even more unlikely they'd want to expose themselves to their own lack of legal jargon! So what is their choice? Back out of the deal, of course, or suggest you must agree to the new terms. Obviously, since the new terms aren't the same, why should you? At that point you could easily contest this "purchase" with a credit agency. Bait & switch, etc...

But that's just an idea... put the same pressure on them they're putting on you!
posted by shepd at 7:29 PM on November 22, 2005

I'm reasonably familiar with Australian contract law, and I understand that UK contract law is quite similar. Most of our case law is yours, anyway.

You made an offer to purchase a Dell. Dell has not accepted your offer yet. To do so, they would have had to communicate their unconditional acceptance of the terms under which you proposed to be bound.

Instead, they've sent you a document containing a range of terms and conditions. In doing so, they have rejected your offer and made a counter offer. The ball is in your court - you may simply refuse the counter offer, and it will die.

It's particularly telling that Dell is not proposing to take action for breach of contract - they know they don't have one. In any case, trashing somebody's credit rating is not a legal or equitable remedy under contract law (those being damages, injunction or specific performance).

There may be some quirk of UK credit law that has nothing to do with contract law. You should simply ask under which statute they propose to carry out their threats, and then proceed from there.
posted by obiwanwasabi at 7:33 PM on November 22, 2005

There is absolutely no chance that Dell will do a single thing to you. I used to work as a programmer there, in finance/forecasting, so I can tell you the ultimate threat to use on them if they continue their lying idiocy.

Simply tell them that you will be returning the system immediately, as would be your right under their 21 day return policy. You see, returns are *very bad* at Dell. They cause all kinds of cascading reactions. First, the salesperson retroactively loses his commission, which he will not like at all. Second, that salesperson's supervisor gets his return percentages bumped higher, so he'll be upset at the salesperson. They are judged quite harshly on those numbers. Third, it bumps the return percentage of the whole "business segment", which they fight tooth and nail to keep down. Telling them that you will be returning the system, and letting the VP of the segment know why you'll be doing so should be sufficient motivation for them to drop you like a hot potato.
posted by Invoke at 9:58 PM on November 22, 2005

The BBC's consumer watchdog addresses a question about UK contracts made over the phone. It says verbal agreements are legally binding, except for consumer credit. I'm not sure how consumer credit is defined.

It also says long distance contracts (including those over the phone) may be cancelled, depending on the subject matter. There is a minimum seven-day cooling off period.

Check here for more info on UK contract law.

In Canada (and most Commonwealth countries with British common law systems), verbal agreements are legally binding.

Note that if you say you are returning the system this may be construed to mean that you did indeed accept the offer.
posted by acoutu at 10:54 PM on November 22, 2005

Oh, and what Obiwanwasabi said.
posted by acoutu at 10:55 PM on November 22, 2005

Most people here are talking about US law. Which is fine.

bonaldi nailed it, but the cooling off period is 7 days, not 14. The magic Google phrase is "UK Distance Selling Regulations 2000".
posted by Leon at 12:29 AM on November 23, 2005

Thirding bonaldi's answer, with Leon's caveat and one of my own - this only covers signing a contract. In the UK, a verbal agreement to buy commits you to absolutely nothing.

Also, from the Department of Trade and Industry's webside:

Written confirmation
When an order has been made the seller must send to the consumer confirmation of the prior information in writing or another durable medium, such as fax or e-mail, unless it has already been provided in writing, eg. in a catalogue or advertisement. This should include information on when and how the consumer can exercise the right to cancel, a postal address where (s)he can contact you and details of any after-sales services and guarantees. The seller must provide this confirmation at the latest by the time that the goods are delivered or, in the case of services, before or in good time during the performance of the contract.

posted by benzo8 at 12:55 AM on November 23, 2005

Call your nearest branch of Trading Standards. Do this straight away (you can get their number from the web site). Tell them everything you've said in the post here and get their advice.

In the interim, if any of the people from Dell ring your sister again, she should ask them whether they would be prepared to make any statement which they are making to her in writing, or if not, accept that the phone call be recorded. She should ask for the names or staff IDs of any of the staff who are talking to her. If they refuse to give those, she should ask to speak to their line manager, and refuse to speak to the original callers.

And then afterwards, write to the most senior person at Dell you can find, copying the letter to Trading Standards, and complain about the behaviour of their staff or agents on the phone.
posted by reynir at 5:28 AM on November 23, 2005

I could see Dells point if they agree to finance the item than they could require insurance as a condition of the loan. Just a thought -- hope it all works out for you...
posted by orlin at 7:09 AM on November 23, 2005

I sould explain myself a bit better -- if Dell only required say 10% down and the customer trashed the machine and returned it or quit paying for it than they indeed would be out a substantial amount of money if they did not have a policy on it.
posted by orlin at 7:11 AM on November 23, 2005

I recently had my own "Dellhell" experience and vow never to do business with Dell again. IMO they are thoroughly unreliable in both sales and support departments. I had to hire a lawyer and appeal to my state attorney-general's office to get Dell to take back a defective laptop. It wasn't easy or fast.

What computer did you buy instead? I'm still shopping.
posted by NorthCoastCafe at 12:40 PM on November 23, 2005

I don't think my conversation could have been construed as a verbal agreement as I told him i wouldn't commit myself to the thing until I'd seen the contract (the reason being that he'd previously sent me a contract in which he'd cleverly ignored the system specs I'd requested and instead pulled some vastly inferior ones out of his bum. The price was the same, though).

Thank you, everyone, for your answers - I'm going to phone trading standards, get them to clarify the law (although that DoTaI(?) quote seems pretty conclusive - thanks benzo8) and then phone Dell and have quiet word.

NorthCoastCafe: I got this one, from PC World. It's very good.
posted by Little Bravado at 4:03 PM on November 23, 2005

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