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Lemon Aid For PCs Gone Sour

Story by Consumer Reports, 2001

The fast-evolving personal computer industry is on the cusp of catching up with an important 1970s-era advance in consumer protection: the lemon law.

Despite rapid progress with better PCs, consumers still face a risk of buying a defective machine. Five percent of desktop PCs sold since 1996 were dead on arrival--totally inoperable when buyers set them up--according to a survey of more than 54,000 Consumer Reports readers last spring. Another 11 percent of these PCs had serious problems in the first month of ownership.

What happens when your computer is a dud? Good luck getting your money back from the manufacturer. Computer makers, who tout their industry as the key to consumer empowerment, take lots of liberties where their own defective merchandise is concerned. They often shift responsibility for warranty work onto the consumer, who must replace parts, rejigger software, and otherwise serve as the unpaid, unskilled hands of telephone tech-support coaches.

In most cases, the crash course in computer repair enables the buyer to fix the problem. But when that fails, the buyer must do more work--shipping or hand-delivering the broken box to a real repair technician. Computer manufacturers seldom send repair people to the consumer's home to fix defective equipment--the first service call alone can plunge that sale into red ink--and they're loath to replace a broken machine with a fresh one that works.

Nationwide, statistics on the number of PC lemons are hard to come by, but 1.5 percent of the PCs our readers purchased in 1999 and the first four months of 2000 have had three or more components replaced, according to our spring survey. We think that reasonably quantifies the PC lemon rate. That equals 238,500 of the 15.9 million desktop PCs sold to consumers last year.

Jerry and Barb Wells of West Chester, Pa., say they know about such problems firsthand. In April 1998 they bought a $2,175 PC from Quantex Microsystems. Over the first year, the hard drive, floppy drive, and speakers failed, and the monitor went kaput, they claim. Also, tech support helped wipe out the preinstalled software and wouldn't replace it, they said.

Finally, after multiple repairs, hours of tech-support calls, and an on-site repair visit, Quantex agreed to take back the computer - if the Wellses paid a 40 percent restocking fee.

"We're appalled," says Barb Wells, who ended up getting the computer fixed for $350 at a repair shop. Quantex declined to comment.

Other consumers report similar experiences with big-name brands, including Apple, Compaq, and Gateway. This is why a committee of the Pennsylvania state legislature considered the nation's first PC lemon law this year. In February, a similar bill was introduced in Illinois.

The bills would standardize guidelines for repair of defective PCs and other computer-related electronic devices sold in the state and would give consumers a statutory right to a refund if the manufacturer fails to fix the machine after two tries. The bills are an improvement over the automobile lemon laws they're derived from because they would require refund or replacement after only two (vs. four) unsuccessful repair attempts and don't require that both attempts be for repair of the same defect, only that the defects make the PC "operate in a manner not intended."

Computer trade groups say that hardware makers can police themselves and that consumers already have protection under the federal Magnuson-Moss Warranty Act.

But Craig Kimmel, a lemon law attorney who has represented hundreds of consumers with PC lemons and who helped draft the Pennsylvania bill, says Magnuson-Moss has loopholes. For example, it allows manufacturers to argue that the law applies only to full warranties, not to the limited warranty they provide, Kimmel says. Under Magnuson-Moss, "only people with the greatest tenacity get action," adds George Scully, a Cook County representative who introduced the Illinois bill.

The Pennsylvania and Illinois bills died this year, but their sponsors say they plan to reintroduce them. The Federal Trade Commission, meanwhile, has expressed interest in using the Pennsylvania bill as a model for federal legislation, Kimmel says. Consumers Union also supports PC lemon laws.

To protect yourself now:

  • Buy a reliable PC. Based on our survey data since 1996 (as of the date this article was written), Dell and Hewlett-Packard were among the more reliable brands. Acerand Micron were among the less reliable.
  • If you buy from a retailer, deal with a reputable company with generous return policies. Consumers who buy direct from a manufacturer should know they may be trading away this line of defense.
  • Pay for your PC with a credit card. You'll have the added clout of withholding payment for unsatisfactory goods under the federal Fair Credit Billing Act.

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