Apple Hit With Class Action Lawsuit Over iPhone Upgrade Program Woes

[Buran]

They pay a set amount for each month the phone is in their possession. That's what they agreed to. That phone still works just fine and there is nothing stopping those people from walking in on launch day and upgrading then or going to a store that has stock and upgrading there.

We were offered eligibility and we got it. People are whining that they didn't get something they aren't owed.

 

[thefarang]

I'm not sure that's how the program works. You signed up to make 24 payments on your phone. After 12 you can upgrade and when you do, you'll get a fresh 24 months to make payments again. You didn't lose out on anything, just delaying when your new 24 month contract begins. It's really just a 2 year loan on an iPhone that you can trade out and start over with a new phone after 12 payments.

You do lose. Let me show you the math.

You sign up Sept last year for IUP. You pay one payment upfront, plus taxes, and then you make 11 payments over the course of the year and now it's Sept 2016. You've paid 50% of the purchase price of the 2015 iPhone and have met all of the terms of the deal which states that you can now surrender your old iPhone back to Apple and start a new 24 month contract on the 2016 iPhone.

If you don't get to purchase the phone until October, you now have made 13 payments and your 2 year contract for the 2016 iPhone begins in October. If you want to order a 2017 iPhone in September, you have only made 11 payments during that time period and you'll be required to make a 12th payment to satisfy the contract in order to place your order in September.

So you paid an extra month in 2016 and you'll have to make an extra payment in 2017 which means that Citizen's Bank collects two extra payments though you fully intended on upgrading every 12 months and Apple assured you that you could.

On top of that, your equity in the iPhone you have given back to Apple has increased with no corresponding recognition of that increased value. In other words, just to keep the math simple, if the iPhone costs $1000 and your monthly payments are $41.66. At the end of 12 months you have paid $500 and one assumes Apple can refurbish and sell the iPhone you turn in for > $500.

But if you ended up making two extra payments, you've paid $583.33 and Apple still gets the phone back which they can still sell for the same > $500 in essence making either Citizen's Bank or Apple an extra $83.33 with no real decrease in the value of the iPhone that you're turning in. Nobody knows if a refurbished iPhone is 1 month old or 13 months old so the value they receive remains constant while your equity is not the same.

Of course, most people who participated in the program understood that. Few would be dumb enough to hold the phone for 23 months and then turn it in under an upgrade when they could make one more payment and own it outright.

But what made the entire financing scheme attractive to users, and the way it was pitched to people, was make 12 payments and get a new iPhone. You essentially only paid $500 to use an iPhone for a year and in exchange you were willing to give up any amount greater than $500 you could have gotten selling your iPhone privately.

 

[Beck Show]

According to the plan as documented on Apples website, you become eligible after the 12th installment payment to upgrade. It does not stipulate anywhere that you get the upgrade on the first day of availability of a new phone.

Source -- http://www.apple.com/shop/iphone/iphone-upgrade-program

I don't believe they are asking to receive the iPhone on release day, but simply to be able to preorder the device the same way others not on the IUP were able to. They're not asking to be moved to the front of the line per se, but just to be included in the same line as everyone else not on the program.

 

[Gravydog316]

Now Apple will have to start charging customer more so they can pay the Boston lawyers. WTF, america

 

[Just_another_Fan]

I think the problem was no one expected to sign up for this program and be treated second class.

There were tons of people who woke up early on pre-order day and were denied the opportunity that every other purchaser had who also woke up early on pre-order day.

You just might be the one person who understands why they are suing. High-five bruh!

 

[BigPrince]

You just might be the one person who understands why they are suing. High-five bruh!

I suspect the majority of people signed up for this program to facilitate a rapid upgrade path that they were already doing on their own prior to Apple creating this process.

 

[thefarang]

They pay a set amount for each month the phone is in their possession. That's what they agreed to. That phone still works just fine and there is nothing stopping those people from walking in on launch day and upgrading then or going to a store that has stock and upgrading there.

We were offered eligibility and we got it. People are whining that they didn't get something they aren't owed.

No, people are whining because when we went to the Apple Store online at midnight last Friday we were given such a small selection of iPhones to purchase from that they sold out almost immediately. Yet, if you changed your payment option to credit card, there you saw the exact phone that you were told was sold out.

ON TOP OF THAT . . . Apple told you that in order to upgrade you could not simply order and wait for it to ship but you would have to go back to their website starting Sept 17 and check back EVERY DAY!

Unless you want to camp out every day at an Apple Store, it's all but guaranteed you won't see an iPhone until October.

 

[Beck Show]

I wonder what would happen if Apple decides to release next year's iPhone 8 in June 2017, three months early?

The program allows individuals to upgrade after 6 months as long as the have made an equivalent of 12 payments.

 

[bkaus]

I agree this suit is a horrible joke and waste of resources. But your comment is not accurate. I don't expect premium access, just access. I was on the online store at 12:01, couldn't get in until 12:09 and by time I tried to reserve various different models at 12:17 was told they were all reserved nationally. I don't mind going on Friday, in fact will do it as I have done for years. But it would have been nice to have one reserved.

I had a "regular order" and I couldn't get online until 12:09 either. Had the generic store being updated message.

 

[Project_Felix]

Jurassic Park had enough quotes to cover this story. Queue the T-Rex!

 

[i hate phones]

They pay a set amount for each month the phone is in their possession. That's what they agreed to. That phone still works just fine and there is nothing stopping those people from walking in on launch day and upgrading then or going to a store that has stock and upgrading there.

We were offered eligibility and we got it. People are whining that they didn't get something they aren't owed.

Not really, people are upset because they signed up for a program directly through Apple and it is proving more difficult to get a new phone than had they not signed up for Apple's program. Not everyone has easy access to apple stores to be able to check stock daily, and people who are upgrading through the IUP were not able to place an order to receive their phone when it is available like everyone else was.

 

[Noel Mendex]

For once, Apple should make enough phones for everyone on launch day instead of creating an artificial demand due to their negligence to make more.

 

[larrylaffer]

Their is no mistake, if it says that people who are in the program can upgrade after 12 months, any day after those 12 months is considered AFTER the 12 months. So Apple is NOT breaking any rules. What they didn't say was that anyone in the program would be given first priority for new shipping phones. That is was those people who created the lawsuit are trying to get. I would expect this lawsuit to be thrown out.

You're ignoring the main point of this lawsuit, which is that people are required to visit Apple stores to do the upgrade. If there is no Apple store within a feasible distance, and again, IF the contract doesn't state this when they signed the contract, that's a clear example of a lack of good faith on Apple's part, and this bolsters the lawsuit's validity greatly.

 

[mdlooker]

I'm confused... so if this lawsuit goes through and wins, then what? Pay the recipients what in damages?

Whats the monetary replacement in this?

 

[budselectjr]

They pay a set amount for each month the phone is in their possession. That's what they agreed to. That phone still works just fine and there is nothing stopping those people from walking in on launch day and upgrading then or going to a store that has stock and upgrading there.

We were offered eligibility and we got it. People are whining that they didn't get something they aren't owed.

How many times are you going to continue to post this nonsense? You have no idea what you are talking about.

 

[Rocketman]

I want to sue McDonald's if the clerk doesn't deliver my food quite fast enough. I want to be a lead plaintiff so only me and the lawyers ever see cash everybody else gets a $5 coupon if you go through all the procedures to get it, and, don't loose it and remember to use it.

 

[Beck Show]

Apple has never said that those who participate in the program get earlier access to the newest model. This is a first world problem if I've ever seen one.

Once again, they were not given earlier access. They weren't even given EQUAL access to order the phone along with those not in the program. They are asking for fair, not preferential treatment.

 

[guitarman777]

Yes and no. If you signed up purely to get your upgrade after 12 payments, but in fact you end up paying 13 to get the same upgrade that's not really OK is it?

Problem is, you're signing up for a loan valued at the full cost of the phone with eligibility to upgrade after 12 months. Nowhere does it say an upgrade is guaranteed after 12 months. It's spelled out in the contract. I seriously read every word when I signed up.

That said, Apple has certainly underestimated the popularity of their program and really should deploy more phones for those wanting to participate in the program.

 

[Prof.]

Good job, 'Murika.

 

[kazmac]

It's not the ridiculous impatience that Apple has pretty much trained us to react with because you must have the new thingy, but if IUP customers couldn't select a phone they were hoping to get when everyone else was trying to also procure a phone, I can understand why people were upset.

However, enough customers called Apple for them to step up to the plate and attempt to do something. I truly hope everyone -IUP or not- gets their phones in a timely fashion. And no hardware / software bugs.

The class action lawsuit is premature; but Apple needs to clearly think anything like an IUP through* and how that would impact pre-orders and launch day reservation. I think waiting an extra few weeks until more phones are made would be a better way to assuage the desires and pre-orders.

*Well they need to stop treating this like a fashion house and sticking their fingers in every pie. Concentrate on software and hardware. The people will come if your product is available and works as it should. Yea, I know, head in the iCloud again.

 

[cheff114]

First come, first serve folks. Just because you're already in the upgrade program doesn't give you premium access to a new iPhone every time.

What a massive joke.

This is what people continually don't get. First Come, First Served wasn't the problem. Many in the program (including myself) had no means of processing our upgrade when they went live. Meanwhile, we just watched all the supply dry up & delivery times slip. This is what Apple has been trying to make right. So save your judgement for another thread.

 

[BootsWalking]

Good timing for this:

http://www.bloomberg.com/news/artic...arned-they-may-pay-for-filing-frivolous-suits

 

[mdlooker]

Well I know now, don't EEEEVER do the installment plan with Apple if I'm interested getting the new phone when i comes out.

 

[Taz Mangus]

Or your phone exploding in your hands, burning down your car or hotel room? That has to be in the works.

And it begins and it probably won't be the last for Samsung: http://news.softpedia.com/news/samsung-faces-lawsuit-over-exploding-galaxy-s7-edge-508169.shtml

 

[TigerWoodsIV]

You do lose. Let me show you the math.

You sign up Sept last year for IUP. You pay one payment upfront, plus taxes, and then you make 11 payments over the course of the year and now it's Sept 2016. You've paid 50% of the purchase price of the 2015 iPhone and have met all of the terms of the deal which states that you can now surrender your old iPhone back to Apple and start a new 24 month contract on the 2016 iPhone.

If you don't get to purchase the phone until October, you now have made 13 payments and your 2 year contract for the 2016 iPhone begins in October. If you want to order a 2017 iPhone in September, you have only made 11 payments during that time period and you'll be required to make a 12th payment to satisfy the contract in order to place your order in September.

So you paid an extra month in 2016 and you'll have to make an extra payment in 2017 which means that Citizen's Bank collects two extra payments though you fully intended on upgrading every 12 months and Apple assured you that you could.

On top of that, your equity in the iPhone you have given back to Apple has increased with no corresponding recognition of that increased value. In other words, just to keep the math simple, if the iPhone costs $1000 and your monthly payments are $41.66. At the end of 12 months you have paid $500 and one assumes Apple can refurbish and sell the iPhone you turn in for > $500.

But if you ended up making two extra payments, you've paid $583.33 and Apple still gets the phone back which they can still sell for the same > $500 in essence making either Citizen's Bank or Apple an extra $83.33 with no real decrease in the value of the iPhone that you're turning in. Nobody knows if a refurbished iPhone is 1 month old or 13 months old so the value they receive remains constant while your equity is not the same.

Of course, most people who participated in the program understood that. Few would be dumb enough to hold the phone for 23 months and then turn it in under an upgrade when they could make one more payment and own it outright.

But what made the entire financing scheme attractive to users, and the way it was pitched to people, was make 12 payments and get a new iPhone. You essentially only paid $500 to use an iPhone for a year and in exchange you were willing to give up any amount greater than $500 you could have gotten selling your iPhone privately.

Well that pretty much sums it up right there. Idc about waiting, but I don't want to waste my money. I wouldn't have signed up if I had to pay 13 or 14 of 24 payments, unless it was just continuous and I could pay 10 months on the next phone if I paid 14 months on the previous phone due to their supply constraints.