Dell Australia found guilty in federal court of deceptive sales practices

[Cal Jeffrey]

Editor's take: Not to defend Dell, but it frequently lists marked-down products on its website that conflict with databases and spreadsheets from other departments. I have written several advertorials for Dell and have encountered discrepancies on its spreadsheets on multiple occasions. Not verifying that the information served to the customer is valid is inexcusable but understandable.

On Monday, the Australian Federal Court declared Dell Australia engaged in deceptive sales practices when selling consumers monitor bundles. According to the ruling, Dell's Australian website made "false or misleading representations" regarding the pricing of monitors added to customer purchases.

From August 2019 to December 2021, Dell Australia promoted monitors by offering discounts if buyers added them to their current orders. The offers appeared on the website pictured with an "add-on" price alongside a higher price in strikethrough font. Consumers fairly assumed that the strikethrough pricing meant they were getting a better deal than buying the monitor separately.

However, the pricing was not indicative of what Dell was charging customers. In fact, in many cases, the "discounts" ended up being the same or even more than what the monitors sold for alone. The Australian Competition & Consumer Commission's (ACCC) Liza Carver called the practice "shocking."

"In some cases, consumers paid more for the add-on monitor advertised as 'discounted' than they would have paid if they had bought it as a stand-alone product, which is shocking," said Commissioner Carver in a statement issued the day after the ruling.

In addition to the strikethrough pricing, Dell also used other deceptive techniques and language to mislead consumers, including "Includes X% off," "Total Savings: $X," "Discounted Price: $X," and "Get the best price for popular accessories when purchased with this product."

The ACCC claims customers spent more than 2 million AUD ($1.3 million US) on about 5,300 add-on monitor purchases during the period in question. The Federal Court mandated Dell to issue full or partial refunds to all customers hoodwinked by the shady dealings. The company must also hire an independent compliance professional "with expertise in consumer law."

Furthermore, the Court is taking comments regarding additional penalties Dell Australia should face, such as fines or other sanctions, and may issue those at a future hearing.

Dell said a pricing mistake on the website was to blame, which was its defense when the ACCC filed its lawsuit last November.

"As we acknowledged in November 2022 when the ACCC commenced these proceedings, due to an unrectified error on our part, our web page misrepresented the level of savings consumers could achieve by purchasing a monitor in conjunction with a desktop, laptop, or notebook," Dell told The Register in a statement on Tuesday.

The company also said that it is considering refunding customers "with interest" to make up for its blunder and is taking measures regarding its pricing procedures to ensure that the mistake doesn't happen again.

Permalink to story.

https://www.techspot.com/news/98983-dell-australia-found-guilty-federal-court-deceptive-sales.html

 

[punctualturn]

And meanwhile, double check how much they are getting paid by Intel to continue leaving out AMD from their business laptops and desktops lines.

Since they "forgot" they were found guilty of doing this back then and told to stop.

 

[Neatfeatguy]

I agree it's shady practice and I'm glad they're getting what they deserve, but consumers also need to be more mindful.

Years ago (during my high school days) my friends and I used to leave out to get lunch from places nearby instead of sitting around and eating school lunch. We'd hit up Taco Bell, Wendy's and so on. At Wendy's I noticed that buying all the items individually from a combo meal saved you $0.50. When I'd go to order I'd start with ordering fries and the sandwich, they'd ask if I wanted to make it a combo meal I'd tell them, "No.", but I would also like to add a drink. If they tried to make it a combo I'd tell them I don't want the combo, I want the items individually.

I do this today when I go grocery shopping. Go to buy a pack of something and it's X dollars, but next to it will be a 2 pack of the same item being sold for 2X+Y, which is priced higher than just buying 2 of the individual packs together. For example, string cheese: a package with 12 pieces is $4.99. Next to it is a package with 24 pieces and priced $10.29. Why would I spend an extra $0.31 for the 24 pack when I can buy 2 - 12packs for $9.98? Granted, this isn't always the case, but it does happen from time to time with products.

Consumers need to pay attention instead of just taking what a company tells them at face value. Sadly, most people don't pay attention and get screwed without even knowing they were.

 

[Cal Jeffrey]

I agree it's shady practice and I'm glad they're getting what they deserve, but consumers also need to be more mindful.

Years ago (during my high school days) my friends and I used to leave out to get lunch from places nearby instead of sitting around and eating school lunch. We'd hit up Taco Bell, Wendy's and so on. At Wendy's I noticed that buying all the items individually from a combo meal saved you $0.50. When I'd go to order I'd start with ordering fries and the sandwich, they'd ask if I wanted to make it a combo meal I'd tell them, "No.", but I would also like to add a drink. If they tried to make it a combo I'd tell them I don't want the combo, I want the items individually.

I do this today when I go grocery shopping. Go to buy a pack of something and it's X dollars, but next to it will be a 2 pack of the same item being sold for 2X+Y, which is priced higher than just buying 2 of the individual packs together. For example, string cheese: a package with 12 pieces is $4.99. Next to it is a package with 24 pieces and priced $10.29. Why would I spend an extra $0.31 for the 24 pack when I can buy 2 - 12packs for $9.98? Granted, this isn't always the case, but it does happen from time to time with products.

Consumers need to pay attention instead of just taking what a company tells them at face value. Sadly, most people don't pay attention and get screwed without even knowing they were.

Very true, and as I mentioned but didn't elaborate on in the piece, Dell's pricing wires are easily crossed.

For example, when working up an advertorial for them I scan through the spreadsheets looking for deals that I think are decent discounts. Every time I find at least one product (usually more) that is marked as a "door buster." these are usually products 40-60% off. However, many times I will cross-reference with the current prices listed (pre-sale) and the product will be for even less OR it will have an MSRP lower than the one listed in the spreadsheet. It's super confusing for me, so I can imagine it could easily fly by a customer without a real good look at how the prices are listed on the site.

 

[takaozo]

Dell...they offer real discounts only for big contracts/volumes. In my 12 years of purchasing Dell hardware at my former company trough Dell Premier program I can tell you that members get 25-30% discounts compared to Dell online shop.

 

[torchyear]

However, many times I will cross-reference with the current prices listed (pre-sale) and the product will be for even less OR it will have an MSRP lower than the one listed in the spreadsheet. It's super confusing for me, so I can imagine it could easily fly by a customer without a real good look at how the prices are listed on the site.

In Australia this is a very black and white violation of consumer law, and inexcusable for any reason. https://www.accc.gov.au/consumers/pricing/price-displays

Several other high profile retailers have been caught out for this, most notably Kogan.

Businesses expecting consumers to just ”caveat emptor” doesn’t fly here as a justification.

 

[Cal Jeffrey]

In Australia this is a very black and white violation of consumer law, and inexcusable for any reason. https://www.accc.gov.au/consumers/pricing/price-displays

Several other high profile retailers have been caught out for this, most notably Kogan.

Businesses expecting consumers to just ”caveat emptor” doesn’t fly here as a justification.

I said as much in the very first paragraph of my report.

Not verifying that the information served to the customer is valid is inexcusable but understandable.

 

[torchyear]

Consumers need to pay attention instead of just taking what a company tells them at face value. Sadly, most people don't pay attention and get screwed without even knowing they were.

Another thing to mention that’s outside the scope of this article is the fact that bundle deal items are often SKUs that have been superseded. Which I suppose is the whole reason for discounts existing, but sometimes the savings are marginal in comparison to the improvements of their replacement SKU. So rather than comparing same-for-same, looking at the current tier substitute can provide a clearer context for the ’true’ value of a discount.

 

[Mr Majestyk]

This is not surprising at all but I'm sure the punishment will be a thrashing with a limp celery stick. Australia is amongst the weakest countries for corporate fines, one analysis showed that a similar infringement in the EU or US would get 10x higher fines.

 

[torchyear]

This is not surprising at all but I'm sure the punishment will be a thrashing with a limp celery stick. Australia is amongst the weakest countries for corporate fines, one analysis showed that a similar infringement in the EU or US would get 10x higher fines.

Yep Kogan got fined AU$350k for the same thing.