Packard Bell Resolves Recycled Computer Dispute

Without admitting wrongdoing, the company agreed to pay $3.5 million to the federal government, and $70,000 in attorney fees and investigative costs to each of the 22 states involved in the settlement. No payments will be made to consumers, a Packard Bell spokesman said.

The company has agreed that if it sells a new computer which includes components that had been used in a previously sold computer, it would provide information on the outside of the carton that the product may include components from a previously sold computer. The settlement affects computers first marketed after December 31. Retailers also will be provided with informational materials for use with consumers.

In addition, such components must be covered by the Packard Bell original product warranty for new products, Pennsylvania Attorney General Tom Corbett said. The agreement resulted from the examination by the attorneys general of industrywide practices involving the recycling of components from personal computers returned to manufacturers under liberal refund policies extended by retailers.

A significant percentage of these returns are products which have never been opened or turned on. Retailers accept the returns and sometimes return them to the manufacturer.

The settlement acknowledges Packard Bell's position that the recycling of components from returned PCs has been a common practice among major PC makers. The quality of properly disassembled and retested components are functionally equivalent or superior to new components, the company said. States involved in the agreement are Arizona, Arkansas, California, Conne-cticut, Dela-ware, Florida, Illinois, Indiana, Kentucky, Louisiana, Massa-chusetts, Michigan, Missouri, New Jersey, New Mexico, New York, Pennsylvania, Ohio, Oregon, Texas, West Virginia and Vermont.