Apple Cheats on iWarranties, Class Claims

SAN FRANCISCO (CN) - Apple won't stand behind its iPhone and iPod warranties, using "inherently inaccurate" bits of indicator tape that change color when they touch water to justify its breach of faith, a class action claims in Federal Court.

Lead plaintiff Sean Pennington sued Apple on behalf of people who tried to return iPhone 3G, 3GS and 4 and iPod Touch devices that didn't work and were still covered by Apple's "comprehensive one-year warranty."

Pennington claims Apple uses the pieces of tape in a "bait and switch," to boost sales and scam people out of their warranty coverage.

"Specifically, Apple relies upon inherently inaccurate pieces of white indicator tape located in areas exposed to the outside of the class devices (which Apple labels 'liquid contact indicators' or 'liquid submersion indicators') that change color when they come in contact with water or other liquid to justify voiding the warranty purportedly because the customer has abused the class device by either submerging it or spilling liquid on it," the complaint states.

It complaint continues: "The external pieces of indicator tape, which are located at the base of the headphone jack at the top of the class device and in the dock-connector housing at the bottom of the class device, cannot accurately indicate whether a class device has been subject to abuse through submersion or liquid spills because they change color upon contact with normal, minimal and non-consequential moisture or condensing humidity resulting from the normal and expected use of the class device, which Apple promotes and markets for a variety of uses, including recreational and outdoors. Moreover, the pieces of tape cannot and do not indicate whether the reported malfunctions actually resulted from abuse through submersion or liquid spills; they can only indicate that the tape came in contact with moisture or humidity, including an amount as little as a single drop of water that is completely absorbed by the tape and that never intrudes into the interior of the class device where it can come in contact with the device's electronic circuitry."

iPhones sell for $99 to $499, and an iPod Touch for $199 to $399, depending on features and storage space, the complaint states.

The class claims Apple knows the indicator tape is defective, but immediately voids people's warranties and charges them for repairs or sells them a new device instead of determining why the device doesn't work.

It claims Apple also denies warranty claims under its "AppleCare protection plan," which costs extra and supposedly provides better coverage than the standard one-year warranty.

Through this unfair policy, Apple has unjustly enriched itself by more than $5 million, and the class has been "improperly deprived of the benefits of warranty coverage for defective class devices," and forced to buy "refurbished or new class devices to replace their defective class devices," the complaint states.

The class seeks an injunction, declaratory relief, specific performance and damages for breach of warranty, breach of faith, unjust enrichment and violations of California business laws.

They are represented by Anthony F. Fata with Cafferty, Clobes, Meriwether & Sprengel of Chicago, and Mark A. Chavez with Chavez & Gertler of Mill Valley, Calif.

Lead plaintiff Pennington claims his iPhone 3G stopped working 8 months after he bought, it while he was playing a fishing game he downloaded.

When he took it in to an Apple Store, the repair tech told him the phone was damaged by liquid and refused to repair or replace it, though Pennington insisted he never got the phone wet. The manager refused to honor the warranty because the indicator tape was pink. Pennington claims he had to shell out $99 for a new phone so he could retrieve his business information.

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