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Consumer Alert : CNET's tech-industry watchdog tells all. 
Gateway to customer: Want a refund? Sue us!
By Nancy A. Feldman 
Executive editor, Computer Shopper
April 2, 2004

Four years ago, Karl Immermann bought a Gateway PC. He had nothing but trouble with it. So he asked for a refund. That's when the trouble really started. Nancy A. Feldman explains what happened next.

We get quite a bit of e-mail from readers complaining about the quality of service and support provided by PC vendors. But one message we received this month stood out because of the epic length of time and effort the reader spent trying to resolve his particular problem. The way Chicago native Karl Immermann tells the story, it's a tale of lies, vandalism, and outright thievery--and it doesn't have a happy ending.

In March 2000, Immermann went to a Gateway Country store and wrote a $3,400 check for an 850MHz Pentium III Gateway Performance 850XL with all the trimmings, including a three-year warranty. At the store's suggestion, he purchased some additional items from Best Buy, including extra RAM, a CD-RW drive, and software, bringing his tab to almost $4,000.

Over the next two years, the machine was in and out of Gateway service centers for malfunctions ranging from freeze-ups and software glitches to power and hard drive failures. Though the stores replaced everything from the hard drive to the motherboard to the power supply, Immermann contends the problems persisted.

By September 2002, Immermann moved to Florida and had the PC shipped to a Gateway Country store near his new home. After the store's repeated unsuccessful attempts to repair the system, he refused to pick it up and demanded a full credit, which he promised to apply toward the purchase of a new Gateway PC. The store agreed and guaranteed a credit upon receipt of the other parts of the system, including the monitor, the speakers, and the software. Immermann complied but received no credit. Exasperated, he told the store that only a full refund would do, and without it, he'd take his case to court.

Immermann filed suit against Gateway, despite its warranty clause requiring disputes be settled through binding arbitration. (Dell has the same requirement; HP does not.) Gateway had been taken to court before on this issue, and its motions to dismiss based on its warranty stipulation were thrown out on the grounds that they violate the federal Magnuson-Moss Warranty Act, which gives consumers the right to have disputes settled in a judicial forum. Gateway is appealing this decision. The judge presiding over Immermann's case, meanwhile, sided with Gateway and signed its motion to dismiss.

After this, Immermann claims Gateway refused to return his PC and banned him from the store. By September 2003, with no computer and no refund, he enlisted the help of his Florida state representative, Jim Kallinger. Kallinger's office called Gateway headquarters in California and was told Immermann could have his computer back but not his cash. He was also forbidden to pick it up at the store; the PC would be shipped to him.

It was, but Immermann claims numerous cables and peripherals were missing. "When I picked it up, it fell apart because all the screws had been removed from the case," he says. "Most of the internal cabling was missing completely. All three RAM modules had been removed, and the power supply had been swapped out for one that didn't fit properly." Immermann returned the PC on the promise it would be fixed. But each time he called, he says, he was told the age of the system made it difficult to locate parts.

This is where the situation stood when Immermann contacted us. When I phoned the store, a service-department employee told me Immermann's computer was fixed and had been awaiting pickup for some time. I notified Immermann, who arrived at the store 15 minutes later. When he turned the computer on in the store, it booted, but when he tried again at home, it wouldn't. He opened the case and jiggled the power-supply cable, and the system came to life but would not boot.

For its part, Gateway wants nothing more to do with Immermann or his computer. "Our position at this point is if he has any issues with Gateway he should take it to the court," says David Hallisey, a company spokesman. "Gateway has exhausted countless man-hours trying to solve his problems, and nothing satisfies him."

Hallisey admits Gateway never fixed the system to Immermann's satisfaction, but he says he doesn't think anyone could. When asked if it wouldn't have been easier just to replace Immermann's computer, Hallisey said Gateway offered him "a slew of options to solve his problems," but he would not elaborate.

So after four years, Immermann has an inoperable PC with an expired warranty. What can you do to avoid suffering a similar fate? The most obvious safeguard is to pay by credit card so that you can dispute a charge. Next, make sure you read the warranty before you buy the system. Chances are you have 30 days within which to return your computer for a full refund if it gives you trouble.

Though you may be able to have your day in court, you're better off forgoing that route and settling things with the vendor yourself. If you have problems with your PC from the get-go, your best bet is to return it for a refund during the allowable period to avoid potential headaches.

Nancy A. Feldman is executive editor of Computer Shopper. While Editor Rik Fairlie is filling in for Computer Shopper's editor in chief, Nancy is writing the Consumer Alert column.

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