Apple return policy exploited in China, 5 arrested

Apple return policy exploited in China, 5 arrested

Summary: Employees at an electronics store have been arrested for allegedly switching new Apple parts with fake ones, then using these to rebuild and sell off as new iPhone 4S devices.

TOPICS: Apple, iPhone, China
Five employees were arrested in Wenzhou for exchanging fake iPhone BAND parts for real ones, as part of their scam build and sell "new" iPhone 4S devices.

The much-ridiculed return policy for Apple products in China was exploited by scammers who exchanged fake parts for real and using the latter to build and sell new iPhones.

According to a report by TechWeb last Friday, five employees at an electronics store selling Apple goods were arrested in the Chinese city of Wenzhou after they submitted 121 fake iPhone 4S BAND parts back in December 2012. The BAND parts were the core of the phone and are worth about 3,000 yuan (US$476) each, it noted.

The scammers allegedly exchanged the fake parts for real ones, bought the back cover, battery and other components, then build and sell these put-together devices as new iPhone 4S handsets for a profit of 1,000 yuan (US$161.62), it added.

It took Apple a few months to spot the scam, but it found out, it informed the owner of the electronics store and an investigation was initiated.

The report noted the police arrested the five involved in the scam on April 5, 2013. These included the shop engineer and her boyfriend, who then implicated three other colleagues.

Apple's return policy in China has been much discussed in recent times, after the country's state-owned TV broadcasting network China Central Television Station (CCTV) aired an investigative report claiming Apple was treating local consumers with discrimination with regard to its after-sales service policy. Unlike other countries where consumers get a refurbished new iPhone if their original one is found to be defective during the warranty period, consumers in China get a refurbished iPhone but with the back cover off the original phone.

Apple CEO Tim Cook subsequently issued a formal apology on Apple China's Web site, pledging to improve repair policy for iPhone 4 and iPhone 4S devices, provide clearer language on its policies and improve supervision and training of Apple's Authorized Service Providers in the country.


Topics: Apple, iPhone, China

Ellyne Phneah

About Ellyne Phneah

Elly grew up on the adrenaline of crime fiction and it spurred her interest in cybercrime, privacy and the terror on the dark side of IT. At ZDNet Asia, she has made it her mission to warn readers of upcoming security threats, while also covering other tech issues.

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  • That company is always having it's returns exploited here too...

    Go to any "genius bar in London? Busy busy busy. Now look again; if you go back again and again, you'll see the same faces. What happens is that the epidemic of phone theft in London is filled by this returns policy. If you get a phone stolen, you block it. It's means that a week or so no uk network will allow it. Thieves used to just sell them abroad to get around the block. However the Genius Bar at apple stores actually "fence" the phone.

    The thieves take a stolen phone, damage it so the it needs to be replaced, then take it to the Genius Bar where the phone is replaced free on the warranty. It has a new imei, looks brand new and is untraceable. It has been fenced. The best part is it's free and you get a phone you can sell in the UK as an "unwanted upgrade" on ebay right back to the person you stole it from.

    This isn't quite as easy with other manufacturers; they require you to send the phone off - my Samsung took 5 weeks for them to change the screen - which means they can work out if you intentionally broke it to get it replaced, or not have to replace the imei at all.

    How do I know this? One of our guys at work had his iPhone stolen by a kid on a bike, when he reported it as stolen, the police told him this is what happens. he went in to apple and asked them not to replace his phone as it was stolen, and they said they knew about the problem, but were unable to help him retrieve the phone, even though the guy in the store admited it "probably would" come through their stores.
  • They Should Do It Like Tivo

    With Tivo, if you open the unit, your warranty is null and void. That would stop this scam. You'd think they would be able to spot the non-standard parts pretty quickly. I guess they don't look.