Document reveals Compaq uses distributors to rebox returned computers and resell as new; court unseals charges against Compaq.WILMINGTON, Del.--(BUSINESS WIRE)--Nov. 13, 1995--Over strong objections filed by Compaq, a federal court Monday unsealed a document detailing how Compaq's distributors rebox and resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. returned computers as new systems. The document reveals that Compaq gives its distributors original factory boxes, packing materials, resealing tape and serial number bar coding to repackage re·pack·age tr.v. re·pack·aged, re·pack·ag·ing, re·pack·ag·es To package again or anew, especially in a more attractive package. re·pack the returned computers so that the PCs are indistinguishable from factory-assembled systems. Unsealed by U.S. District Court Judge Roderick R. McKelvey, the document also reveals that Compaq, at least up until 1993, supplied used parts to its distributors and other resellers which were then used in re-assembling product for resale to the public as new. Compaq's return practices were uncovered by Packard Bell See Packard Bell NEC. as part of its investigation into Compaq's practices in defending itself against a lawsuit Compaq filed against the Sacramento, Calif.-based manufacturer in April. Packard Bell attorneys interviewed numerous current and former Compaq employees as well as other resellers. Investigators found that, in contrast to Compaq's public statements, which claim that all returned PCs come directly back to the company for "meticulous me·tic·u·lous adj. 1. Extremely careful and precise. 2. Extremely or excessively concerned with details. [From Latin met " screening, systems are frequently returned to Compaq distributors, which quickly repack Re`pack´ v. t. 1. To pack a second time or anew; as, to repack beef; to repack a trunk. s> and redistribute re·dis·trib·ute tr.v. re·dis·trib·ut·ed, re·dis·trib·ut·ing, re·dis·trib·utes To distribute again in a different way; reallocate. these returned PCs to the commercial and retail channels as new. Facilitating these practices, Compaq provides its resellers with original factory boxing and packaging materials, making these reboxed systems look identical to originally assembled product. "Compaq has been portraying itself as an angel, but we have contrary information," said Marshall Grossman of the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. firm Alschuler, Grossman & Pines. Packard Bell last week expanded its own lawsuit against Compaq, alleging that the Houston-based manufacturer has been misrepresenting its practices in the processing of returned product and passes off as "made in America" certain of its products manufactured overseas. "What we want is for Compaq to stop pointing fingers, because Compaq has more than a few things it needs to clean up about its own practices," Grossman said. "Packard Bell did not start this fight, but the company is demonstrating it will vigorously defend its products and its practices." CONTACT: The Bohle Co., Los Angeles Liz O'Donnell Liz O'Donnell (Irish: Eilís Ní Dhomhnaill; born July 1956) is a former Irish politician. She is the Deputy Leader of the junior coalition government party, the Progressive Democrats[1] , 310/785-0515 |
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