Dell Financial Services Nightmares – And How You Can Solve Them

Few credit cards generate as many complaints as those issued by CIT Bank on behalf of Dell, Inc.  The “Dell Preferred Account” allows consumers to use special 0% financing rate payment plans to budget their purchases without incurring interest charges… as long as the required minimum payments are made on time, and the balance is paid entirely in full by the date the finance plan expires.

Dell absolves itself of much of the responsibility it should have regarding its credit program by claiming a third party company is responsible for administering it.  Indeed, CIT Bank, which handles store credit card programs for a myriad of retailers, is an independent entity that hands out credit cards and manages the billing and servicing of accounts.  Dell should realize, however, that a company doing business using its name and reputation which serves consumers poorly harms the Dell brand.

Clearly, there is a long history of problems with Dell Financial Services that has led to settlements with several state Attorneys General.  Among them, these allegations raised in a settlement document:

• Dell offered credit promotions, including 0% interest financing offers to consumers without appropriate disclosure that not everyone applying would qualify for the 0% finance offer.  Customers often made purchases assuming they were qualified, and were extended credit in some instances at a much higher percentage rate than advertised;
• Informing some consumers they were qualified for 0% financing offers when they were in fact not qualified;
• Not providing warranty service in accordance with promises made, or as state law requires;
• Not providing next day warranty service when promised;
• Not fulfilling rebates

A settlement agreement was supposed to have resolved most of these problems, but clearly have not, at least from the complaints that continue to pour into sites like The Consumerist and Ripoff Report.  In fact, I know someone who is a victim of Dell Financial Services — myself.

On a promotional purchase I made about a year ago, at 0% interest, I configured automatic payments for Dell in equal monthly installments, designed to pay the balance in full prior to the expiration date of the financing plan.  I’m well accustomed to such promotions, having participated in them with Comp-USA, Circuit City, Best Buy, and others.  It’s not a difficult concept.  Just make sure your minimum payment requirement is always fulfilled and that the balance reaches zero for that promotion before the expiration date.

When a payment for May went astray, I contacted Dell Financial Services customer service by telephone and inquired about a missing payment.  It was to be deducted automatically from my checking account, and indeed it had been right on schedule, but never turned up posted to my account.  A Dell representative claimed to have put a “trace” on the missing payment, and offered to accept a substitute payment just in case the results were not available prior to the upcoming expiration date of my financing plan.  That was acceptable to me, if only to save time and hassle asking for credit later for any accrued finance charges billed because a promotion was not paid in full by its expiration.

Little did I realize this was to start a bungling of my account and an avalanche of fees and interest charges.  The missing payment also turned up a few days later.

The bad news arrived on my late May bill.  The telephone payment carried with it a “convenience payment fee” of $9.95 charged a week after the payment was made.  Additionally, despite the statement reflecting a fully paid off promotion one day before its expiration, Dell billed deferred finance charges retroactively back to the date of purchase, to the tune of $80.21.  New owing balance on an account that should have had a zero balance?  $90.16!

Contacting Dell customer service to resolve this billing foul-up proved to be an impossible endeavor.  Several e-mails went unanswered, despite being assigned case numbers and acknowledged by Dell’s e-mail auto-response system.  Telephone calls to customer service resulted in 30 minute hold times, the maximum allowed, before an announcement was made that “technical problems” prevented the call from reaching an agent, and was summarily disconnected.

Unacceptable.

Perusing the Better Business Bureau website listing for Dell Financial Services, I found something interesting — the company has a pretty strong record of “resolved” complaints, meaning that when a complaint was filed with the BBB, Dell paid attention to fixing them to the satisfaction of the consumer.

I filed my own complaint with the Central Texas Better Business Bureau on June 2nd.  By June 11th, the matter was completely resolved.  Not only did Dell Financial Services refund the interest charges, it also credited back the $9.95 payment convenience fee nonsense, and gave me written assurance that the account had a zero balance:

To: Central TX Better Business Bureau
BBB CASE#: [redacted]

Dear Better Business Bureau Representative,

We are in receipt of a complaint originally addressed to the Better Business Bureau. In the complaint the customer expresses dissatisfaction in regards to the deferred finance charges assessed on the Dell Preferred Account.

Please accept our sincere apologies for any disappointment they feel they have experienced during their transactions and contacts with Dell Financial Services.

Dell Financial Services records indicate that [I] paid the full purchase price before the expiration date of the promotion, as indicated on their billing statement, and paid the Minimum Payment Due each billing period when due, no Finance Charges will be imposed on the purchase. [I] was credited deferred finance charges of $80.21 and $9.95 for a payment convenience fee. The credits will take effect immediately and will appear on their June 12, 2009 billing statement.  Please allow this letter to serve as confirmation that the current account balance is $0.00 and DFS considers the account to be paid in full.

In addition, a refund check for $30 was mailed to the address listed on the Dell Preferred Account.  Please allow 7-10 business to receive the payment refund check.

We regret any inconvenience this matter may have caused and thank them for bringing this matter to our attention.

It is our hope that we have adequately clarified our position in regards to this complaint.  Please do not hesitate to contact us should the BBB or the customer need further clarification.

Sincerely,
Sylvia Alexander
Executive Services
Dell Financial Services L.L.C.

With this rapid resolution, my advice for anyone experiencing stonewalling or unresponsive customer service within Dell Financial Services file a complaint with the Better Business Bureau.  It literally took just a few minutes, and saved me an enormous amount of time and frustration.

It’s unfortunate that Dell has not taken more aggressive measures to prevent these problems from occurring in the first place.  Dell Financial Services’ account management website is among the worst I’ve ever encountered.  Online payments are processed by a third party company — Checkfree, and scheduling a payment involves accessing Checkfree’s portal payment system from within Dell’s website.  I have found Checkfree’s system to be unreliable and suffers frequent extended outages, making it impossible to schedule payments and feel confident they will be made on time.  The company also has a confusing payment policy that suggests payments are “normally” made by Checkfree on the next business day, but in fact elsewhere Dell Financial Services claims it can take 3-5 days for them to “receive” a payment scheduled through Checkfree.  That can create confusion for consumers with an approaching due date.  A same day payment option is also offered, but carries a $9.95 fee for using it, which is ridiculous.

Consumers trying to schedule payments over an entire year to pay off a 0% promotional offer will find doing so through the website nearly impossible.  Direct auto-debiting your payment from your checking account also requires a copy of a canceled check and the completion of an authorization form which must be faxed or mailed to them.  That is cumbersome and unnecessary.  Most online payment systems simply require information from a check to set these payments up, not an actual copy of a check.

Of course, these are tricks and traps designed to stick consumers with “gotcha” fees if they attempt to make a payment on or very near to the due date, discourage consumers from setting up automatic payment scheduling for the Dell credit account, and instead have to remember to visit the website each month to schedule payments manually, assuming Checkfree’s portal is working that day.  Under these circumstances, late payment fees and other extra charges associated with making payments are common for those holding Dell credit accounts.

In my situation, attempting to impose retroactive finance charges on a paid-in-full balance is a special kind of customer abuse, but something you need not have to accept.

How to File a Better Business Bureau complaint against Dell Financial Services:

1. Visit the BBB Online Complaint Center.

2. After entering the system, you will be asked a series of questions.  At the time of writing, these involved your location, what type of complaint is involved, and whether you are in the armed services.  For the second, indicate this is a complaint against a “product or service.”

3. Indicate your country and zip code as indicated.

4. To find the correct target for your complaint, enter “Dell Financial Services” in the “search by company” box and press “next.”

5. A list of possible matches will appear.  If within the United States, this is the address you want:

Dell Financial Services
12234 N IH 35 # B
Austin, TX  78753-1705

6. After choosing the correct address, a screen will appear informing you your complaint will be handled by:

BBB of Coastal, Central & Southwest Texas (Austin, TX)
1005 La Posada Drive
Austin, TX 78752
Phone: (512) 445-2911
Fax: (512)445-2096
Email: info@austin.bbb.org
Web: http://www.centraltx.bbb.org

7. You will be asked to verify the nature of the complaint.  Select “No” for all of the following:

• Does your complaint concern employment practices?
• Does your complaint allege discrimination?
• Does your complaint allege civil rights violations?
• Has this complaint case ever been involved in litigation?

8. You will be asked to give complete contact information, which you should do, of course.

9. Indicate which of the company’s locations is involved with your complaint. You will see both a PO Box and the aforementioned street address. Select either.

10. You will be asked to categorize your complaint.  Feel free to choose the ones that best match your situation.  Mine involved billing, and more specifically, 11-1199 None of the Above, Credit, Billing, or Collection Complaint Issue.

11. Finally, you will be asked to describe your complaint in detail.  Here is how to proceed:

As an example, here is how my complaint was formatted:

Disputed Amount: $90.16
Account Number: Does Not Fit [Not enough space provided to list entire number, see below.]
Order Number: N/A
Complaint Summary: Dell charged retroactive interest on a finance plan paid in full before plan expiration.

Complaint in Detail: Account Number: [redacted] [Since your account number won't fit in the space provided for it, list it here.]
Utilized 12 mos/0% finance offer, and made last payment to clear balance on 5-6-09 for promotion expiring 5-7-09.  Dell charged $80.21 in deferred finance charges and $9.95 “convenience fee” for making an online payment.  Did not respond to e-mail support request sent twice.

Desired Settlement: Refund
Describe Settlement: Want full refund of $80.21 in billed deferred finance charges and credit for “convenience payment fee” which we did not request.

Click the Submit Button at the bottom and your complaint will be filed.  Expect 7-10 days to pass before you hear back from the BBB, which will pass along any response received from Dell Financial Services.
I hope this will be of help to anyone else who had to deal with Dell Financial Services, and that your resolution was as good as mine was.