Oregon students returned thousands of fake iPhones, costing Apple $900k

Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @05:21PM (#19577248)

Apple warranty fraud is a great way to make money. I know of a guy who between 2008 and 2010 would purchase used iPod lots from Costco Electronic Hardware Services, refurbish the water damage indicator in the headphone jack and dock, and then try to return the iPod to one of the few Apple stores in the Seattle area. The refurbishing method would consist of cutting tiny strips of white wax paper, applying a little adhesive, and then sliding the paper flush down the hole. When Apple caught onto this guys method, he would later take the whole headphone assembly apart by using a pen knife to lift the plastic around the headphones, pulling the jack out, and using whiteout to cover the other end.

I went to the Apple store with this guy and felt ashamed just being around him as he dropped off a dozen water damaged iPod Nanos, each with an appointment, telling the guy that they were from guys in Iraq, as if that were to add some emotional weight to getting new ones.

Nearly a decade later I found out the guy was running the same scam with the iPhone SE by using reassembled water damaged phones or dummy phones from China. I am guessing he didn't get caught because the scale of his operation were a few at a time, maybe a couple hundred in a year, but not thousands over a year.

Now that I think about it, I had let him use my Apple account for appointments and claims, and ever since then, I have always had a bad time working with the genius bar over things that I bring in.

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Re:Oregon students returned thousands of fake iPhones, costi... by kyleblarson on Thursday April 04, 2019 @07:11PM (#19578028)

Generally not a wise idea to publicly admit to being an accomplice to theft.

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Re:Oregon students returned thousands of fake iPhones, costi... by delish on Thursday April 04, 2019 @08:48PM (#19578593)

There is probably a long tail of bad outcomes that could arise from admitting illegal activity on the web. But I don't think it stands up to the kind of cause-and-effect that'd be like:

IF you say on a forum, "I broke this law," THEN you get an email from [email protected] saying, "You spoke and we listened!"

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Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @09:09PM (#19578713)

I had an email about an iPod Nano. More than happy to talk to Apple about it, but when I emailed them in 2010 about the scheme my friend was running, I never heard anything back.

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Re:Oregon students returned thousands of fake iPhones, costi... by tptacek on Thursday April 04, 2019 @07:12PM (#19578046)

I don't think simply being in the room with someone committing a crime, even knowing that's what they're doing, doesn't give you accomplice liability. I think you have to assist or encourage. You do not generally have an affirmative responsibility to prevent people from committing crimes.

edit: but see below

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Re:Oregon students returned thousands of fake iPhones, costi... by munk-a on Thursday April 04, 2019 @07:15PM (#19578067)

So... assisting like...

> let him use my Apple account for appointments and claims

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Re:Oregon students returned thousands of fake iPhones, costi... by tptacek on Thursday April 04, 2019 @07:19PM (#19578103)

Yikes. I missed that.

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Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @09:12PM (#19578729)

I let them know about this way back when, email went into a void.

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Re:Oregon students returned thousands of fake iPhones, costi... by wasdfff on Friday April 05, 2019 @12:46PM (#19584403)

Is iFred a persons name?

As always with the internet, “the stories and information posted here are artistic works of fiction and falsehood. Only a fool would take anything posted here as fact.”

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Re:Oregon students returned thousands of fake iPhones, costi... by bonestamp2 on Thursday April 04, 2019 @06:17PM (#19577662)

I know what you mean, but I don't think I'd call any method of fraud a "great" way to make money. Even as small as he is, that's still taking him to jail when he gets caught. Eventually he'll get high enough on their list that he'll be worth stopping.

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Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @09:10PM (#19578716)

Yeah, more like “great”, but with a sarcastic tone to it.

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Re:Oregon students returned thousands of fake iPhones, costi... by ma2rten on Thursday April 04, 2019 @06:32PM (#19577755)

I had a bad times with the genius bar too. I don't think it has anything to do with the scam.

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Re:Oregon students returned thousands of fake iPhones, costi... by ikeboy on Thursday April 04, 2019 @06:30PM (#19577747)

If they were buying authentic used iPods why is it fraud?

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Re:Oregon students returned thousands of fake iPhones, costi... by ThrustVectoring on Thursday April 04, 2019 @06:52PM (#19577902)

They were faking the water damage indicator so that they'd be covered for replacement instead of not covered.

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Re:Oregon students returned thousands of fake iPhones, costi... by droithomme on Thursday April 04, 2019 @11:02PM (#19579292)

My understanding is that it is known that the Apple water damage indicator triggers even if you have it in a high humidity environment like the south during the summer. Or on the counter in the bathroom while taking a shower. Or wiping the case with a slightly dampened cloth to remove dust and fingerprints, as is recommended. It's been intentionally designed this way, with an incorrect triggering level, in order to be able to fraudulently deny warranty claims and save money. Lots of accounts of people who absolutely never dropped it in water have had legit warranty claims denied. In my opinion, the scam here is being perpetrated by Apple, and has been ongoing a long time.

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Re:Oregon students returned thousands of fake iPhones, costi... by eridius on Friday April 05, 2019 @12:07AM (#19579609)

Apple is literally famous for doing free warranty replacements for people who don't actually qualify. There's thousands and thousands of stories of this sort of thing over many years. Forgive me for not believing you when you say Apple is conspiring to defraud customers out of warranty replacements.

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Re:Oregon students returned thousands of fake iPhones, costi... by tluyben2 on Friday April 05, 2019 @01:44AM (#19580027)

I guess it depends on how much a stickler for rules the particular tech is? I had a laptop replaced which did not have waterdamage but did have the indicators activated; the guy asked me; ‘did any fluids spill over this?’ I said no and he gave me a new laptop. I had an iPad which definitely had no water damage either (I was the only user) but that one was refused because the indicators were triggered. Those things are flawed and this process is/was flawed, so now I simply have insurance that covers whatever: saves thinking about it.

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Re:Oregon students returned thousands of fake iPhones, costi... by eridius on Friday April 05, 2019 @01:52AM (#19580064)

Water damage indicators are known to not be perfect. That's unfortunate but true. It doesn't mean Apple is deliberately making them be bad in order to avoid warranty replacements though.

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Re:Oregon students returned thousands of fake iPhones, costi... by tluyben2 on Friday April 05, 2019 @03:58AM (#19580622)

No, agreed. So in really humid weather, say, HK in the summer, the keyboard of the Pro breaks randomly if you do not care it in a watertight pouch and the indicators trigger. Not waterdamage as Apple means it to be and I have not had issues with replacements there but you wonder what the purpose of the indicators is then.

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Re:Oregon students returned thousands of fake iPhones, costi... by akhilcacharya on Thursday April 04, 2019 @05:25PM (#19577279)

What's an "iPod lot"? I've never heard this terminology before.

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Re:Oregon students returned thousands of fake iPhones, costi... by velosol on Thursday April 04, 2019 @05:28PM (#19577305)

A 'lot' is a unit of issue in this case as a supply/logistics term. It means buying a grouping of damaged iPods (say the lot was 25 or 50 individual iPods).

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Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @05:28PM (#19577302)

Costco would sell a couple dozen to several hundred iPod Classics, Nanos, and Touches, all in varied condition, as a "lot". At best you could buy these based off of a grade, which just judged their physical condition, but most of the time you were always buying these a couple dozen at a time, sight unseen.

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Re:Oregon students returned thousands of fake iPhones, costi... by akhilcacharya on Thursday April 04, 2019 @05:38PM (#19577371)

Oh my, I didn't know this was available. Who usually buys these? Third-party refurbishers?

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Re:Oregon students returned thousands of fake iPhones, costi... by bluedino on Thursday April 04, 2019 @07:09PM (#19578015)

https://liquidations.walmart.com/

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Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @05:54PM (#19577482)

You have to be a business in the state of Washington and sign an agreement with Costco. It isn't a thing they open with anyone and when I inquired about doing this on my own, even with a license, I was turned away at the door by security.

Pretty sure it is a shady arm of Costco.

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Re:Oregon students returned thousands of fake iPhones, costi... by gowld on Thursday April 04, 2019 @06:11PM (#19577618)

Why is it shady? It's just like Amazon Warehouse Deals or Apple Refurbished and Clearance, but Costco only sells in bulk

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Re:Oregon students returned thousands of fake iPhones, costi... by arosier on Thursday April 04, 2019 @05:34PM (#19577339)

Here's an example: https://www.directliquidation.com/auction/269088-10-pcs-appl...

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Re:Oregon students returned thousands of fake iPhones, costi... by ericlewis on Thursday April 04, 2019 @05:29PM (#19577311)

Lot basically means “a pile of items”.

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Re:Oregon students returned thousands of fake iPhones, costi... by cmauniada on Thursday April 04, 2019 @09:59PM (#19578991)

I believed you right until you said you let him use your personal Apple account...

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Re:Oregon students returned thousands of fake iPhones, costi... by unityByFreedom on Thursday April 04, 2019 @09:39PM (#19578879)

I wonder if this strategy was posted to dark webs somewhere.

I recently heard of a friend of a friend who bought his mom a Tesla with profits from buying used iPhones on eBay and repairing them.

Maybe he was just submitting them to Apple with this same hack.

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Re:Oregon students returned thousands of fake iPhones, costi... by JudgeWapner on Thursday April 04, 2019 @07:24PM (#19578134)

good for him for finding a market inefficiency and exploiting it. I dont know why people's moral compunction kicks in for profiting off a trillion dollar company. He used their system for his advantage, just like apple uses the UK's "double irish" system to their advantage. It's just business. You're not depriving anyone of property.

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Re:Oregon students returned thousands of fake iPhones, costi... by cornellwright on Thursday April 04, 2019 @07:54PM (#19578324)

It's not "exploiting a market inefficiency" anymore than someone breaking into your house is just exploiting a lock inefficiency. It's plain old fraud.

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Re:Oregon students returned thousands of fake iPhones, costi... by yungstevejobs on Friday April 05, 2019 @11:18AM (#19583379)

Except one of those is legal and the other is not. I guess it’s okay to steal from someone after they have x amount of money right?

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Re:Oregon students returned thousands of fake iPhones, costi... by JudgeWapner on Friday April 05, 2019 @04:54PM (#19586940)

it's ok to steal from them after they've stolen X billion from USGOV and consumers. Absolutley. and AAPL essentially writes its own laws. Let consumers draft legislation with the same access and bribes/lobbying as AAPL and see how long this stays illegal.

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Re:Oregon students returned thousands of fake iPhones, costi... by yungstevejobs on Saturday April 06, 2019 @08:52PM (#19594048)

They didn’t steal anything. Sorry our tax laws are shit and they used them to their benefit. Do you personally pay more taxes than you should? I doubt it.

For clarification I don’t like the practice of off shoring your money. Apple isn’t the only corporation that does this though. You’re misplacing your blame when it really should be at the US government. We can work to get rid of money in politics but for now that is unfortunately where our country is headed. For the corporations.

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Re:Oregon students returned thousands of fake iPhones, costi... by _cerv on Thursday April 04, 2019 @09:11PM (#19578722)

Pretty sure this puts a strain on the relationship between Costco and Apple on some level. It’s also just a dick thing to do.

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Re:Oregon students returned thousands of fake iPhones, costi... by Carpetsmoker on Thursday April 04, 2019 @11:37PM (#19579476)

So pickpocketing is just finding a "wardrobe inefficiency"? Burglary is finding a "lock inefficiency"?

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Re:Oregon students returned thousands of fake iPhones, costi... by JudgeWapner on Friday April 05, 2019 @04:51PM (#19586912)

Corporations don't have pockets, and burglary is theft. If AAPL had a policy that allowed you in their premises and legally allowed you to remove items, then that's a market inefficiency.

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