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A Cold Day in Dell

In an event not unlike Toyota’s spectacular fall from consumer grace with the recent accelerator pedal recalls, faulty computer components recently compounded Dell’s ongoing public relations and financial woes. Documents unsealed in a federal lawsuit suggest that Dell knowingly covered up a tendency for the capacitors in their mainstream OptiPlex line of computers to “pop” and “leak.” Capacitors play a crucial role in directing the flow of current across computer motherboards. They are not supposed to pop or leak.

Dell appears to have been the worst victim of the industry-wide capacitor plague. Due to a formula mix-up, an Asian PC component supplier distributed capacitors that were inclined to burst and spew brown liquid. Though many companies, such as Apple and HP, also received these carbuncular capacitors, they did not distribute as many affected computers as did Dell.

Doesn’t sound too terrible, right? Well, here’s the kicker – Dell employees appear to have gone out of their way to hide these problems.  So when customers called Dell hoping for help with their computers, customer service agents allegedly sidestepped the issue and allowed people to rely upon their faulty machines.

Attorneys maintain Dell’s innocence, saying that plaintiff Advanced Internet Technologies “cherry-picked” documents to create an illusion of impropriety. Choice snippets from these documents report:

We need to avoid all language indicating the boards were bad or had ‘issues’ per our discussion this morning.”

Other documents indicate that Dell salespeople were instructed:

Don’t bring this to customer’s attention proactively” and “Emphasize uncertainty” when addressing the OptiPlex systems.

Doesn’t sound very “cherry,” does it?

Though Dell extended its warranty on the affected systems and replaced them when customers requested, they did not recall the computers. As such, many of Dell’s OptiPlex customers may be unaware that they have defective computers.*

Perhaps the alleged cover-up should not be surprising considering that Dell sold millions of OptiPlex systems between 2003 and 2005, including a large number to some of its biggest customers – Wal-Mart, Wells Fargo and the Mayo Clinic, among others. In an interesting development, Dell even balked at replacing computers at the law firm defending them from the lawsuit.

Whether the case settles or goes to trial, if the capacitors caused data loss, Dell may face a whole new wave of customer complaints and lawsuits.

* From May 2003 to July 2005, Dell shipped around 12 million potentially faulty OptiPlex desktop computers – the company’s mainstream product for business and government customers. Two of the primary models affected are the OptiPlex GX270 and OptiPlex GX280.

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