| 9823563 B259487 UNITED STATES OF AMERICA In The Matter of DOCKET NO. C-3888 The Federal Trade Commission, having reason to believe that Dell Computer Corporation, a corporation ("respondent"), has violated the provisions of the Federal Trade Commission Act, 15 U.S.C. §§ 45-58, as amended, the Consumer Leasing Act, 15 U.S.C. §§ 1667-1667e, as amended, and its implementing Regulation M, 12 C.F.R. § 213, as amended, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent Dell Computer Corporation is a Delaware corporation with its principal office or place of business at One Dell Way, Round Rock, Texas 78682. Respondent markets computer systems for sale or lease to consumers.2. Respondent has disseminated advertisements to the public that promote consumer leases, as the terms "advertisement" and "consumer lease" are defined in Section 213.2 of Regulation M, 12 C.F.R. § 213.2, as amended. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44 4. Respondent has disseminated or has caused to be disseminated consumer lease advertisements ("lease advertisements") for computer systems, including but not necessarily limited to the attached Dell Exhibits A and B. Dell Exhibit A is an electronic advertisement. Dell Exhibit B is a television advertisement. These lease advertisements contain the following statements: A. "DELL DIMENSION XPSR . . . Configured Price* [A fine print disclosure at the bottom of the ad states: ". . .Personal leasing arranged by Dell Financial Services L.P., an independent entity, to qualified customers. Amount of monthly lease payments above is based upon 36 month lease. Above monthly lease payments exclude taxes which may vary (for example, Hartford City, IN, sales tax: $4.30/month); shipping cost due with first payment; no security deposit required; subject to credit approval and availability. Lease terms are subject to change without notice."] (Dell Exhibit A) B. [Audio:] ". . . For just $99 a month, you can lease this Dell Dimension XPS with a 233 MHz Intel Pentium Processor." [Video:] "$99/MONTH, 24 MOs" [A fine print disclosure at the bottom of the ad states: ". . .Personal leasing arranged by Dell Financial Services L.P., an independent entity; Amount of monthly lease payments based upon 24-month lease. First and last monthly lease payments due prior to delivery: $197. Above monthly lease payments exclude tax which may vary (for example, Hartford City, IN, sales tax: $4.93); shipping charges due with second payment; no security deposit required; subject to credit approval and availability. Lease terms subject to change without notice. For details, call 1-800-955-3355. . . ."] (Dell Exhibit B) FEDERAL TRADE COMMISSION ACT VIOLATIONS COUNT I: Failure to Disclose Adequately that Transaction Advertised is a Lease 5. In lease advertisements, including but not necessarily limited to Dell Exhibit A, respondent has represented, expressly or by implication, that consumers can purchase the advertised computer systems for the monthly payment amounts prominently stated in the advertisements. These advertisements do not disclose adequately that the advertised monthly payment amounts are components of lease offers. 6. The fact that the offers pertain to leases would be material to consumers in deciding whether to lease or purchase a computer from respondent. The failure to disclose adequately that fact, in light of the representation made, was, and is, a deceptive practice. 7. Respondent's practices constitute deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a). COUNT II: Failure to Disclose Adequately Lease Terms 8. In lease advertisements, including but not necessarily limited to Dell Exhibit A and B, respondent has represented, expressly or by implication, that consumers can obtain the advertised computer systems at the terms prominently stated in the advertisements, including but not necessarily limited to the monthly payment amount. 9. These lease advertisements have failed to disclose adequately additional terms pertaining to the lease offer, such as the total amount of any payments due at lease inception or the term of the lease. This information would be material to consumers in deciding whether to lease a computer system from respondent. The failure to disclose these additional terms, in light of the representation made, was, and is, a deceptive practice. 10. Respondent's practices constitute deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a). CONSUMER LEASING ACT AND REGULATION M VIOLATIONS Count III: Failure to Disclose Required Information Clearly and Conspicuously 11. Respondent's lease advertisements, including but not necessarily limited to Dell Exhibits A and B, state a monthly payment amount, but fail to disclose clearly and conspicuously certain additional terms required by the Consumer Leasing Act and Regulation M, including one or more of the following terms:
12. Respondent's practices have violated Section 184 of the Consumer Leasing Act, 15 U.S.C. § 1667c, and Section 213.7 of Regulation M, 12 C.F.R. § 213.7. THEREFORE, the Federal Trade Commission this twenty-eighth day of July, 1999, has issued this complaint against respondents. By the Commission. |