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Apple the victim after Chinese scammers exploit returns policy

Fakers exchanged phony parts for real to build 'new' iPhones

Internet Security Threat Report 2014

The on-going saga over Apple’s “unfair” after-sales service in China has taken another twist after it was revealed that scammers exploited its returns policy to exchange fake parts for real ones, enabling them to build and sell new devices.

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 to Apple, claiming they were damaged and needed replacing.

BAND is effectively the main part of an iPhone, with a value in China of around 3,000 yuan (£315), according to TechWeb (via TechInAsia).

The scammers would apparently exchange the fakes for real ones, buy a back cover, battery and other components and then build and sell as new iPhone 4S devices for a profit of 1,000 yuan (£105) a go.

It took Apple over a month to spot the scam, after which the owner of the store in question was informed and an investigation begun. On April 1 police finally cuffed a shop engineer and her boyfriend as the ringleaders.

Ironically, the investigation was being carried out at the same time as state-run media outlets in China, led by national broadcaster CCTV, were lambasting Apple over its “unfair” returns policy.

The main charge levelled was that, unlike in other countries, Apple would replace defective phones under warranty with new devices but use the back cover from the original phone so as to circumvent local laws requiring a reset on the warranty period.

CEO Tim Cook later offered “sincere apologies” in a grovelling open letter published on the Apple China web site and pledged to broaden warranty support.

But with scams like this likely to be just the tip of the iceberg, it's clear the fruity tech titan has a lot more to worry about in China than appeasing the authorities. ®

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