Apple Said to Have 'Dramatically Reduced' Multi-Billion-Dollar iPhone Repair Fraud in China

[jpn]

WOW, feels shamed as Chinese to see they came up with such a ridiculous procedure for illegal profits at the cost of citizens' credit system. SHAMED SHAMED SHAMED. The country is so huge that there is such a group of uneducated ruler breakers to harm the nation's integrity. SAD. Wish the worlds can further collaborate to improve resource efficiency and provide easier accessibility to high quality education so that people will not do such a bad thing for a living. SAAAD

hi

really appreciate your comments. thanks.

like you, i am always amazed (but not surprised) at these types of criminals, who are essentially lazy and unethical people trying to defraud people and companies.
these types exist in all countries, not just China.

apple, as the #1 (or #2) company on the planet has resources (talent and money) to try to combat these types of crimes happening in China (as well as other types of fraud and crime happening against it in other countries).
but unfortunately almost no other company has that depth of resource to combat it. so china remains a very very difficult market for almost all companies.

anyway, its great to see a person from China post your kind of post. thank you.

Maybe this type of fraud is the reason behind this new policy for MBPs: https://www.macrumors.com/2018/10/04/t2-macs-must-pass-diagnostics-for-certain-repairs/

we dont know if its related.

but, i totally agree with apple's trying to secure its supply chain component base - which, unfortunately at the consumer end means less non-apple repairs.
i want end to end security not just coming from the operating system, but in its hardware as well.
apple, pls hurry these major changes. we need them fast.

 

[LogicalApex]

More reason to want Right to Repair laws in our own country. One of the tenants of R2R is that manufacturers have to offer OEM parts to outside services. A readily available supply of OEM parts would mostly curb black markets like this one.

No, this makes right to repair laws harder to push for. As it makes it harder for companies to prevent fraud as it forces companies to honor third party repairs and to prove that the third party repair and/or component is responsible for the exact issue at hand.

DRM on parts and techniques like Apple used here are predicated on genuine parts and repairs to prevent the fraud.

It is probably a strong reason we are seeing what Apple is supposed to be starting up with the T2 chip in the 2018 MBP that was covered extensively here a few weeks ago.

 

[Onexy]

Don't worry, these fraudsters aren't the biggest threat to honest customers. Apple is.

 

[nicho]

I fail to see how this costs Apple “billions of dollars”. 1,800 fraudulant claims a week assuming a full retail cost replacement of $750 a piece is only about $70 million a year. If this has been going on since 2012 that would only be around $420 million. That leaves $580 million to develop counter measures before hitting the billion dollar mark.

The Shenzhen apple store isn’t the only one in China.

 

[sehix]

Almost

I fail to see how this costs Apple “billions of dollars”. 1,800 fraudulant claims a week assuming a full retail cost replacement of $750 a piece is only about $70 million a year. If this has been going on since 2012 that would only be around $420 million. That leaves $580 million to develop counter measures before hitting the billion dollar mark.

You seem to be assuming that there is only one Apple store in China.

 

[AgentAnonymous]

I actually felt much more comfortable in China than in major European cities, where people were always warning about pickpockets and thieving gypsies ( I honestly didn’t know that word was still used in normal conversation).


The world is full of amazing people, and not so amazing people.

China, unlike Europe, is currently putting minorities in concentration camps. It’s one of the most dangerous places in the world in general if you’re not Asian (they’re very racist), and/or if you say something in public the government doesn’t like, which will make you disappear no matter what you look like.

 

[Cubeeless]

Won't blockchain fix this?

At this point Blockchain would work as proof of ownership. It could advance to a level of fraud detection through smart sensors, which report device activity to the blockchain/tangle. This could be done with technologies in existence, but the sensors in the devices are missing/don't measure what would be required, Blockchain/Tangle/Blocklattice programming not completed and the GUI is not yet developed.

 

[npmacuser5]

And I grew up in China, spent hundreds of three weeks. Does pulling off a fraud take skills? Yes. Is fraud illegal and punishable? Absolutely. Are fraudsters despised by decent people? Not a doubt. So I’m not sure whether your guides were just trying to impress you or something — some guides love to trick foreigners or even non-locals into believing stupid stuff. There are certainly finer (and sometimes larger) disagreements on ethical standards, but I’m pretty sure the entire civilized world find fraud, thievery, etc. distasteful.

Meanwhile, I’ve lived in the U.S. for many years and the amount of scams I encounter is pretty comparable.

While I respect your expertise, time in China, easy to find shops who are selling a ripoff everything. I mean walk two blocks in Beijing from the Marriott, so much fake stuff, mind boggling. If the authorities, as you say are against this policy, they must have some observation challenges. Would be easy to take an afternoon strole and close down entire sections of most major Chinese cities. Not saying the same true here and or other countries, but China does seem to be winking at the problem more then most. The guides were locals and the advise not overstated from my observations.

 

[Crow KC]

...and this is why the rest of us have to deal with Apple products being less and less user-serviceable with time, with everyone screaming hate at Apple for their measures to prevent fraud. What jerks to ruin things for everyone.

 

[charlituna]

Why did I just read an article that said that they were struggling with the fraud, still?

there's still fraud in the US. this article is only about reductions in China. the other article might have been about other areas
[doublepost=1539130160][/doublepost]

More reason to want Right to Repair laws in our own country. One of the tenants of R2R is that manufacturers have to offer OEM parts to outside services. A readily available supply of OEM parts would mostly curb black markets like this one.

except this fraud has nothing to do with right to repair in any country. these folks are all about money making frankenphones etc

 

[pika2000]

WOW, feels shamed as Chinese to see they came up with such a ridiculous procedure for illegal profits at the cost of citizens' credit system. SHAMED SHAMED SHAMED. The country is so huge that there is such a group of uneducated ruler breakers to harm the nation's integrity. SAD. Wish the worlds can further collaborate to improve resource efficiency and provide easier accessibility to high quality education so that people will not do such a bad thing for a living. SAAAD

It's not ridiculous. I mean they sell fake eggs and rice just to get profit. They even use plastic in fried street food to add and make the "crunchiness" last longer. I mean they are literally killing each other for profit. It's the side effect of large population. Similar issues can be seen in India and Indonesia, the second and fourth largest population in the world.
[doublepost=1539131343][/doublepost]

It must be that bad that you can't get authorities to get involved and take the "multi-billion dollar" loss instead? How did the police get involved and make the arrest?

We are talking about China, and Apple is a foreign company from the "evil" west. The obvious bias from the local authority is already there, and the bureaucracy probably won't help. And Apple is not just "taking" the loss, they are figuring out ways to reduce it (from changing their policies to hardware tamper resistant methods).

 

[KGB7]

The whole country is a Fraud and the rest of the world helped them.

Thanks everyone!

 

[Solomani]

i am surprised the peak wasn’t 100%. welcome to china, apple.

Fraud, meet China. China, meet Fraud, your long lost twin.

 

[AppleHaterLover]

Fraud, meet China. China, meet Fraud, your long lost twin.

I don't know, man. Shady stuff happening in shady countries. Groundbreaking

 

[eow]

While I respect your expertise, time in China, easy to find shops who are selling a ripoff everything. I mean walk two blocks in Beijing from the Marriott, so much fake stuff, mind boggling. If the authorities, as you say are against this policy, they must have some observation challenges. Would be easy to take an afternoon strole and close down entire sections of most major Chinese cities. Not saying the same true here and or other countries, but China does seem to be winking at the problem more then most. The guides were locals and the advise not overstated from my observations.

Well, if you put cheap (yet functional, but maybe of inferior quality) knockoffs in the same basket as fake antiques (illegal, yes), or worse, fraud schemes like the one described in this article in the same basket, then sure. They are quite different from my point of view though. Cheap knockoffs are not really “fake”, and sellers of such don’t usually hide the fact that they are knockoffs. You may argue trademark violation or whatnot, but since you know what you’re buying, you’re not deceived. If said merchant intentionally deceives you, then as I said they are despised and may be held accountable. Many things are better attributed to economic conditions than ethical standards.

 

[fairuz]

More reason to want Right to Repair laws in our own country. One of the tenants of R2R is that manufacturers have to offer OEM parts to outside services. A readily available supply of OEM parts would mostly curb black markets like this one.

That makes sense, but I'm not sure how the criminals are currently showing that their parts are OEM when they sell them.
[doublepost=1539138219][/doublepost]

I actually felt much more comfortable in China than in major European cities, where people were always warning about pickpockets and thieving gypsies ( I honestly didn’t know that word was still used in normal conversation).


The world is full of amazing people, and not so amazing people.

The guy you're replying to is saying that crimes like scams, IP theft, etc aren't really crimes there, but physical things like theft and murder are. I think he's right, but I've never been anywhere east of the Middle East, only heard from many Chinese and Indian friends.

 

[doctor-don]

Why did I just read an article that said that they were struggling with the fraud, still?

Because the fraud still exists. This article said it had been reduced, not eliminated.

I fail to see how this costs Apple “billions of dollars”. 1,800 fraudulant claims a week assuming a full retail cost replacement of $750 a piece is only about $70 million a year. If this has been going on since 2012 that would only be around $420 million. That leaves $580 million to develop counter measures before hitting the billion dollar mark.

It’s unlikely that any copy would spend more to prevent fraud than it costs to be a victim of the fraud. This is one of the reasons the United States was so late to adopt chip readers for credit cards. It was cheaper for the card issuers to make good on the fraudulent transactions than it was to upgrade the entire credit card system.

(proofread?)
1,800 fraudulent claims a week does not include ALL the stores that were involved.

 

[JPSaltzman]

Maybe Apple should hire Bansky to design a self-destruct shredder into every iPhone ... if it's tampered with, it self-destructs! Works on a million-dollar piece of art! Why not a $1500 iPhone?

 

[Abazigal]

...and this is why the rest of us have to deal with Apple products being less and less user-serviceable with time, with everyone screaming hate at Apple for their measures to prevent fraud. What jerks to ruin things for everyone.

It does help put the entire situation in its proper context. It’s not so much that Apple doesn’t want people to be able to repair their products, but that the process of doing so opened up another can of worms that they have to handle.

Which brings me back to claims made by youtubers such as Louis Rossmann. His skills are unquestionable, and we certainly need more people like him, but I am beginning to feel that his hatred and disdain for Apple is misplaced and I don't think he sees the bigger picture on why Apple does certain things. He lives with what he sees in his little bubble.

 

[pharleff]

Meanwhile they refuse to replace my battery because I replaced my broken screen with a third party screen.

I know over the last year or two that changed. You can get a battery replaced as long as it has NOT been replaced at a 3rd party repair shop. If there's any indication that it has, you're SOL. Mind you, some of these 3rd party shops will be glad to swap your battery with another after market battery. It's a coin toss.

 

[truthertech]

More reason to want Right to Repair laws in our own country. One of the tenants of R2R is that manufacturers have to offer OEM parts to outside services. A readily available supply of OEM parts would mostly curb black markets like this one.

It would actually be the opposite. If you push third party repairs, demand for the black market parts will sky rocket by shops looking to shave costs over the much higher price Apple charges for parts.

 

[Gudi]

WOW, feels shamed as Chinese to see they came up with such a ridiculous procedure for illegal profits at the cost of citizens' credit system. SHAMED SHAMED SHAMED. The country is so huge that there is such a group of uneducated ruler breakers to harm the nation's integrity. SAD. Wish the worlds can further collaborate to improve resource efficiency and provide easier accessibility to high quality education so that people will not do such a bad thing for a living. SAAAD

I am convinced that anyone who knows how to swap the processor in a phone already has a higher education. This scheme is by no means ridiculous, but sophisticated.

 

[Wanted797]

Wait. People with suitcases of iPhones standing outside a store... and the staff are still replacing them?

 

[racerhomie]

Ma

3 out of 5 customers in HK and China at its peak were frauding apple gutting parts or providing fake parts?

That’s insane to me! Outright disgusting really

—


We are also seeing the downfall/downside of China being such a key part of the supply chain too with the Supermicro scandal that has now supposedly affected a major US network which isnt disclosed.

So now im beginning to think there may be smoke to the Apple story, but cant say with any degree of certainty, bc they’re just another customer of Supermicro, or were at one point.. and Supermicro had some security breaches as an understatement. Apple also use Google servers in China for iCloud. REASSURING!

...BUILD THE STUFF IN USA! Ensure the supply chain isnt tampered with,
And dont Host on Google’s stuff. Now you got Google AND China to worry about... unless they dont care in the first place and only the business model of selling hardware is part of their PR pitch, they arent actually interested in fully seeing it through.


In any case, Bad news week for Apple/tech. Glad Apple is addressing the scammers tho that disgusts me that its billions in losses.

making stuff in the US is too expensive. The iPhone manufacture value is only 3-4% of the entire product.

 

[Lerxt]

Don't worry, these fraudsters aren't the biggest threat to honest customers. Apple is.

What a ridiculous contribution.