Michigan iPod repairman scams 9,000 iPods from Apple

Michigan iPod repairman Nicholas Woodhams thought that he had beat the system. He discovered a way to manipulate Apple's iPod repair and warranty programs to obtain 9,000 free iPods which he then re-sold for a tidy profit, reports Ars Technica.

According to prosecutors in Michigan -- who have filed criminal charges in the case -- Woodhams used a clever combination of valid iPod serial numbers (which he guessed at) and credit cards that wouldn't accept charges to request new iPods under the Apple's "advanced exchange" program.

You've probably done an advanced exchange at one time or another. It works like this: a company will send you a replacement unit (usually refurbished, sometimes new) in advance of receiving the defective one back. They usually require a credit card number as collateral. That way if you don't send the defective item back before a deadline lapses they charge your credit card.

Beating Apple's advanced exchange system wasn't his only trick. Woodhams also scammed Apple by swapping the back cases (where the serial number is located) from out-of-warranty iPods with back cases from in-warranty units, presumably allowing him to replace broken, out-of-warranty iPods with new/working units.

Apple has filed a civil suit against Woodhams.

This brings up a number of questions:

• 9,000 is a whole lot of iPods to scam. How did this get by Apple? Did he automate it in some way? I'm guess that he didn't fill out 9,000 forms by hand.
• Apple advance exchanges iPods? Shuffles no less? I had no idea...
• What exactly is a credit card "that doesn't accept charges?" Is it over the spending limit? I thought that most credit card transacations did a "pre-auth" of a certain dollar amount to make sure that the account holder had enough credit.
• Where were these 9,000 iPods shipped? Did Woodhams use the same address/es? Apple's systems should have caught onto this one. "Gee, Mr. Woodhams' on his 5,000th iPod, boy he sure has some bad luck."

I'm sure that Apple is shoring up their iPod warranty systems as we speak.

Photo: Engadget (and no, that's not Woodhams' stash.)