How students with fake iPhones from China allegedly fooled Apple – Quartz

Two Chinese men attending college in Oregon allegedly used thousands of fake iPhones to scam a company that should probably have known better: Apple.

During the alleged scheme, a partner in China would regularly send packages of 20 to 30 fake iPhones to Yangyang Zhou and Quan Jiang, who were in the US student visa. The duo will then send these knockoffs with repair requests to Apple. If the company decided on a fake device, was eligible under the warranty, it would repair it, or more often replace it with a genuine model – usually a new phone – that students would then send to China to be resold at a profit. [19659002] The fraud was first reported by the Oregonian, and it is described in detail in a criminal complaint filed last month by federal prosecutors.

Federal agents were tipped off to the scheme in April 2017 when they opened five suspicious packages on their way from Hong Kong that contained phones with possibly false markings.

In their exchange with Apple, the duo used their own contact information, as well as the addresses of friends in nearby states, claiming that the phones would not turn on. Jiang's name is related to 3,069 repair requests, according to prosecutors. Apple estimates it completed 1,493 of them, making a loss of $ 895,800. It rejected the others, as it normally does for entities found to be forged or manipulated, a spokesman told the oregonian.

Federal prosecutors have ordered Jiang to deal with counterfeit goods and fraud; Zhou is accused of sending false information about export documentation. Zhou and Jiang claim in court that they did not know that iPhones were forged.

In recent years, fake iPhones have come to look at the real thing. Apparently, the errors are now so good that they dump Apple technicians themselves.

Apple is not alone. In the United States, fraudsters out of an estimated $ 17 billion in 2017, according to a National Retail Federation survey. Many of them utilize the company's generous guarantees and return policies. Amazon has been at the center of many of these creative schemes. Over the years, Apple has slowly tweaked its repair policy to prevent scammers. Although some states have regulations that prohibit organized detailed theft, there is no federal law to help fight it. As companies try to make their return policies scam-proof, ordinary consumers (paywall) may suffer the consequences.

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