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After Years of Battle, Acer Settles Lawsuit for 1GB of RAM

Jan Lee headshotWords by Jan Lee
Investment & Markets

If you are one of the many who bought an Acer laptop computer in the last five or so years and have been dealing with computer freezes, shut downs and general computer malaise, there may be good news.

Acer America Corp has agreed to the settlement of a class action law suit that was filed against it in 2009 for allegedly not including enough RAM in their computers to meet Vista specifications. After “extensive, arm's length negotiations,” the Taiwanese-owned company said that it will settle, but does not admit to any wrongdoing.

The suit was filed by two Ohio residents, Clay and Lora Wolph, who said they purchased a 4520-5458 at Walmart in 2008, and then found that the computer would freeze or crash during operation.

They were later told by a local computer technician that while the Vista Home Basic package could get by with the 1GB of RAM that was customarily available in the Acer laptops, their Vista Premium, which had been preloaded at the time of purchase, required additional 128 MB of memory to operate. They appealed to Acer for help, but were left with shelling out another $157 to have the additional 1GB of RAM added.  In March 2009, the Wolphs sued Acer, and the suit was upgraded to class-action status later that year.

As one who can personally attest to the frustration of trying to operate an Acer notebook without sufficient RAM, the settlement is a relief. Somewhat.

What it doesn’t account for – and class action suits rarely do – is the hours of delays, computer reboots and inconvenience that users have been faced with over the past, say, five years. Online tech forums are replete with complaints about slow-running, inoperable Acer notebooks that seem incapable of running the preloaded Vista program. Unfortunately, the blame has often been foisted on Vista designers; few of the tech boards that this writer found noted that the Acer was underpowered from the start.

While the Wolphs’ suit gains much of its mileage from the apparent needs of the Vista Premium software (which Microsoft states is larger than that of the basic version), it likely that one of the reasons this suit was approved for class-action status is the additional small print in Vista Home Basic’s system requirements:

  • 512 megabytes (MB) of system memory Note: On system configurations that use system memory as graphics memory, at least 448MB of system memory must be available to the operating system after some memory is allocated for graphics.

It doesn’t take a computer tech to figure out that today’s high-powered online graphics are going to eat up the available resources quickly, (especially if you happen to love the use of browser tabs for quick reference).  My virus protection tells me this multiple times a day, so why couldn’t the designers?

In other words, customers who bought the basic program also suffered freezes, shutdowns and slower-than-molasses performance.

For those Acer notebook users who have opted to join the class action suit, the settlement offers a bare-bones fix for the problem:

Those who no longer own their Acer can claim one of two awards:

  • A 16GB USB Flash Drive with ReadyBoost technology

  • A$10 check.

Individuals who still have their computer can choose between three awards:

  • A 16GB USB Flash Drive with ReadyBoost technology

  • A$10 check

  • 1GB or 2GB laptop memory DIMM upgrade sufficient to allow the computer to operate with 2GB of RAM

Those users, who like the Wolphs were forced to pay to have their computer upgraded (before April 25, 2013) can claim up to $100 in expenses.

In my case, (since I am still in possession of my Acer), I’ll be cashing in my claim form for one more GB of RAM. That’s not to say I’ll have the opportunity to use it in my present laptop, since it will likely arrive sometime next year, and my Acer is somewhere around, let’s see, 120 years old according to the current computer life span.

According to one representative at the claim administrator’s help desk, claim forms were sent out to approximately 950,000 known Acer users. Since not everyone remembers to send in registration paperwork after a purchase, there are likely many more customers affected by this suit. But according to the representative, the suit has garnered the expected amount of response, with “a lot of people sending in their claim forms or asking for information.”

And that’s no surprise. As the fourth-largest computer manufacturer in the world, costs in suits like this can mount quickly. Acer is currently looking at a settlement cost of $22.7 million.It should be mentioned that this is actually only one of two suits that have been levied against Acer in the last five years.

Looking at what seems to be a pattern in approach, it isn’t hard to wonder whether Acer’s ongoing slide in revenue could have something to do with its customer service techniques. Acer’s strong lead as the world’s second-largest computer manufacturer at the end of 2010, resulted in earnings of $40 million in the first quarter of 2011. By that same time in 2012, however, its earnings had slipped to just $11 million, and by Q2 2012, to $1.87 million. The company’s earnings improved by Q1 2013, but its Q1 2013 $17.24 million profit still places Acer in fourth place in the computer manufacturing sector.

It seems to me that Acer has forgotten a fundamental lesson in business management: a happy customer is often a return customer. In today’s social media world, that translates to even more new customers. Six years of avoiding the issue and then scotch-taping it with the minimum resources that should have been in the box at the time of sale leads customers to wonder whether Acer may be hiding other financial problems.

Either way, many customers will be awaiting the outcome of this proposed settlement, which will be heard in court in San Francisco on October 4, 2013.  Acer laptop owners who want to join the suit however, must do so before the July 24, 2013 deadline.

More information about the suit is easy to find: KCC Class Action Services, which is overseeing this portion of the settlement stage, has handily named the website by a moniker that unfortunately, every customer will be able to remember: Acerlawsuit.com.

Publication disclosure: This writer is a class member of this suit and expects to benefit from the topic of this research in the form of one GB of RAM ... hopefully.

Image of Acer logo by Xirritate (Wikimedia CC).