I can’t help but get a little bit of personal satisfaction out of this story.  It seems that Dell Computers was engaged in a large scale “shell” game or “bait and switch” scheme in New York.  A New York judge recently found that Dell misled consumers repeatedly by engaging in “false and deceptive advertising” of its promotional financing terms/incentives and service warranties.  The New York Attorney General’s (”AG”) office logged over 1,700 complaints from consumers.

Dell was luring consumers to purchase its computers by offering free financing, rebates, upgrades, and  other incentives for “well qualified” customers.  However, according to the AG, as few as 7% of consumers actually qualified for the promotions.  The vast majority of applicants were instead offered hefty interest rates between 16% to 30%, conveniently financed through Dell Financial Services.  The judge, among other things, enjoined Dell from advertising certain promotions without first  prominently disclosing to consumers how many applicants were likely to qualify for them.

On the service end of things, the judge found that many consumers were placed on hold for technical support for inordinately long periods of time, had to call repeatedly to get through to a technical representative (who I’ve found to be useless anyway), and many instances where the company refused to provide on-site service.  Some customers apparently waited for months or even years for service.  So much for their “next day” service guarantee.

As an owner of 2 Dell computers that have been nothing but trouble within months of buying them, it’s somewhat gratifying to see the company get slammed for its deceptive conduct.  Almost all of my experiences with Dell’s technical support have been, uh, well—what’s the Hindi word for “abysmal”?  I stopped calling them long ago and now use my own pricey IT consultant.  In any case, my frustrations are clearly widespread and well-founded.

As I’ve said before, the “unfair or deceptive” standard used by almost any AG’s office is an especially broad one that easily encompasses conduct which may not meet the higher standard used for “fraud.”  With fraud, it must be shown that a company actually knew that what it was doing was wrong—although in this case, the folks at Dell seemed to be fully aware of their actions.  How could they not be? 

But an AG doesn’t need to jump through hoops to prove fraud anyway.  Showing unfair or deceptive conduct is much easier.  And once the AG has a high-profile and wealthy corporate defendant in its sites that is the subject of 1,700 consumer complaints, rest assured that it will  pursue the company vigorously.  Given my own problems with Dell, I say: “Give ‘em hell!”

Talk about a slow news day.  A recent article in USA Today discusses the so-called “fine print” in ISP contracts and then concludes that it doesn’t really matter anyway.  This non-story highlights the fact that ISP contracts, which their company lawyers draft, give ISPs rights to read their subscribers’ e-mail, block their subscribers from accessing certain websites, and can terminate their subscribers for overusage of their networks.  The horror.  Imagine that?  A business that protects itself.  The shareholders will be outraged.

As an attorney who drafts these contracts, this article is much ado about nothing.  Yes, ISPs put all sorts of language into these agreements to make sure that their services are not abused by users.  But simply because an ISP has the right to read a user’s e-mail or block a user from accessing certain sites doesn’t mean that it will actually do so.  The article makes it sound inevitable.

An ISP, like every other business in America, is keenly aware of the public relations disaster that would result if it was disclosed that they routinely read their users’ e-mails, blocked access to websites, or simply terminated their users accounts due to overusage, without good cause.  They would quickly and perhaps permanently lose users as the media and blogosphere savaged them.  And as they know all too well, everything in cyberspace lives on indefinitely. 

But think of the public relations disaster that would result if it was disclosed that an ISP was aware or suspected that a user was engaging in wide scale spamming, copyright infringement, or the downloading of child pornography.  Or that certain users were hogging bandwidth to the point that other subscribers’ service was affected, while the ISP took a laissez-faire attitude?  It’s not exactly a model of corporate responsibility in these post-Sarbanes Oxley times.  The blogosphere would again be buzzing, albeit for different reasons.  You’re damned if you do, and damned if you don’t.

Furthermore, some of these clauses are economic necessities.  The RIAA has begun targeting ISPs whose users engage in massive and sustained downloading of copyrighted music through their networks.  If an ISP suspects that a user is downloading copyrighted material and does nothing, it can be held liable for contributory copyright infringement in certain instances.  But by terminating the offending user’s account, it may insulate itself from liability.  The “fine print” of the contract allows an ISP to do so.

Is an ISP contract really that different from signing a lease with a landlord?  A landlord has the right to access your apartment with or without notice and can potentially invade your privacy.  A landlord puts certain restrictions as to how its property can be used and how many people can live in it.  And a landlord can evict you under the right circumstances.  While internet access is certainly important nowadays, so is having a place to live.  Yet many tenants have rules not unlike what their ISPs impose, but don’t assume that their landlords will exercise them indiscriminately.

So the contractual provisions such as those described in the article are not necessarily a bad thing.  It all depends upon the circumstances.  If an ISP does include a provision that a court finds to be unfair or onerous, it can be struck from the contract (to say nothing of the scrutiny the ISP would get from that state’s attorney general).  So it’s not as if an ISP can do anything it wants.  While it may sound like this is a case of “ISPs gone wild,” the simple fact is that—for the moment at least—this was an article in search of a story.  But when an ISP does overreach or overreact, I’m sure we’ll hear about it somehow.