Fraudulent iPhone repair claims in China cost Apple billions of dollars over a period of five years

“Fraudulent iPhone repair claims made in China cost Apple billions of dollars over a period of five years, according to a report in The Information,” IANS reports. “In the 2013 financial year, Apple had set aside $1.6 billion for warranty repair costs… But thanks largely to the fraudulent scheme in China, Apple ended up spending $3.7 billion in that period, the report said.”

“As part of the highly sophisticated fraud scheme run by organised teams, rings of thieves were buying or stealing iPhones and removing valuable components like CPUs, screens and logic boards, replacing them with fake components, said the report on Monday citing more than a half-dozen former employees familiar with the fraud,” IANS reports. “The thieves would then walk into an Apple Store and return the iPhones, claiming they were broken. After receiving the replacements, the thieves then resold the valuable parts.”

“Apple gradually tightened the norms surrounding its repair practices to check the fraud, leading to a drop in the fraudulent repairs in the region from a peak of 60% to about 20%,” IANS reports. “However, Cupertino, a California-headquartered tech giant, is now facing similar issues in other markets like Turkey and the United Arab Emirates, the report said.

Read more in the full article here.

MacDailyNews Take: It took Apple years to figure this out?!


  1. I think that like most things Apple, this story and the amount of $$ lost is greatly exaggerated by the media.. This is not to say that the fraud does not exist, but the actual cost of the loss while perhaps significant, just isn’t what is claimed, and its unlikely Apple is going to come out and refute it.

    Apple it appears is aware of it of course, and it takes time to develop reasonable policies that still support “real” customers, as opposed to those that want to rip you off.

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