Apple US fined $9 million for misleading some Australian customers

Joanna Estrada
June 19, 2018

Thanks to a 14-hour time difference between Australia and NY, it was Tuesday morning in Australia when a Federal Court in that country ordered Apple to pay a $9 million fine.

Via its United States website, customer service calls, and Apple Australia in-store staffers, the tech giant had then told at least 275 customers between February 2015 and February 2016 that they were ineligible to remedies if their phone or tablet had been repaired by a third-party store.

"Apple's representations led customers to believe they'd be denied a remedy for their faulty device because they used a third party repairer", ACCC commissioner Sarah Court said.

As a result of the investigation, a concern arose that in some cases Apple was providing error 53 warranty claim customers with refurbished iPhones and iPads instead of new products. It released an iOS 9.2.1 update later that February to restore bricked devices, but reports showed it did not re-enable Touch ID and customers complained they still lost photos, documents and apps.

Court said Apple's United States head office would be responsible for paying the fine.

The ACCC launched legal action against Apple in April 2017 claiming it had misled consumers about their warranty rights by routinely refusing to inspect or fix faulty devices for free if they had been repaired by a third party.

In the federal court, Apple US admitted it had said as much "to at least 275 customers".

"If people buy an iPhone or iPad from Apple and it suffers a major failure, they are entitled to a refund".

The ACCC investigated consumer complaints regarding "error 53" on Apple devices and took the United States tech giant to court in 2017. "If customers would prefer a replacement, they are entitled to a new device as opposed to refurbished, if one is available", Court said.

The Australian arm of Apple also offered a court enforceable undertaking to improve staff training to make sure it complies fully with Australian Consumer Law.

An Apple spokeswoman said in an email the company had "very productive conversations with the ACCC about this" without commenting further on the court finding.

Other reports by Click Lancashire

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