Apple will pay compensation in water-damaged iPhone cases

Did Apple refuse to repair your iPhone because it said you'd dropped it in water?

Has Apple ever refused to repair your iPhone because it was water damaged? If you made a warranty claim and were turned down by Apple before December 2009 you may be able to claim compensation.

Similarly if Apple refused to repair your iPod touch for free prior to June 2010, you may be able to claim compensation.

In both cases compensation claims are only valid in the US, but the fact that Apple has agreed to settle in the cases above may well mean that similar settlements could happen here in the UK.

In fact back in June 2010, BBC Watchdog highlighted this exact concern. According to the BBC report, unhappy Apple customers were claiming poor after sales service when they returned faulty iPhones. Apple Store staff were insisting faults were the result of water damage, which voids the phones warranty, leaving customers little option but to buy a new iPhone, pay for the repair or shop elsewhere.

Watchdog suggested that Apple was failing in their duty to properly check customer claims that phones have stayed clear of water or liquid.

Apple has set aside $53 million to be used for compensation claims from people who attempted to get a damaged iPhone and iPod touch fixed within their warranty period, but were refused because Apple asserted that the device had water damage, thereby voiding the warranty.

Wired obtained Apple's statement, signed by Apple chief litigation counsel Noreen Krall. A key point to note: Apple admits no wrongdoing.

In the statement Apple outlines that it "disputes the claims alleged in the Federal Action and the State Action and does not by this Settlement Agreement admit any liability or wrongdoing whatsoever."

Apple writes that it "has agreed to enter into this settlement Agreement to avoid the future expense, inconvenience and distraction of burdensome litigation."

The company later emphasizes that the settlement is based on "the desire of Apple to conduct its business unhampered by the distractions of continued litigation".

What was the basis of the legislation?

At issue was Apple's former Liquid Damage Policy that was changed in December 2009 for iPhone and in June 2010 for iPod touch. Prior to that date a warranty claim could be denied based "solely on a Triggered Headphone Jack LCI and or Triggered Dock LCI".

One of the first things that Apple does when you request a repair to be made to a faulty iPhone or iPod touch, is to check the status of Liquid Contact Indicator (LCI). This is a hidden tape strip (provided by 3M) that signals excessive exposure to water. The LCI reacts to moisture and is found in the device's headphone jack and charging port (hence the reference to it being 'triggered'). If Apple discovered that this LCI is white it means that the paper has not come into contact with water, and therefore your warranty is intact. However, if it is pink, your warranty is void and you may face an expensive repair bill.

This is because the warranty only covers iPhone or iPod touch defects that aren't caused by: "accident, abuse, misuse, liquid spill or submersion, flood, fire, earthquake, or other external causes."

The plaintiffs who brought the class action suit were all denied service because the indicators in their devices had turned pink.

What if my iPhone never got dropped in water?

The original complaint claimed that these "External Liquid Submersion Indicators" could be "triggered by other types of moisture that should not cause damage in any event - such as a palm that becomes sweaty after a work-out, and other small amounts of moisture to which the devices would be exposed during ordinary, foreseeable use."

The lawsuit sought to highlight a issue with the the Liquid Submersion Indicator that Apple uses that might cause them to turn pink even if the device has not been submerged in water.

Crucially, since December 2009 Apple has used the phrase "Liquid Contact Indicator" to describe the tape, which before that date it described it as a "Liquid Submersion Indicator".

Even tape maker 3M agreed that humidity could have caused the tape to turn pink, according to the lawsuit.

The complaint, which dates back to 2010, also alleged claims for breach of contract (and the implied covenant of good faith and fair dealing), common-law fraud, and unjust enrichment; for violations of the Song-Beverly Consumer Warranty Act, and the Unfair Competition Law.

Was Apple wrong to refuse to fix my iPhone?

You may be able to get compensation if you answer yes to the following:

- Apple refused to fix your phone or iPod touch because it claimed that it had water damage

- The device was within its one-year warranty (or longer if you had Apple Care)

- This happened before December 2009 for the iPhone and June 2010 for the iPod Touch

- The device in question is an original iPhone, the iPhone 3G, iPhone 3GS, or a first and second generation iPod touch.

- You are in the US...

How much compensation can I get from Apple?

Apple has deposited $53 million in a settlement fund. Settlement amounts range from $160 for a 8GB iPod touch to $300 for a 16GB iPhone.

According to the settlement, Apple will publish a notice with a link to the settlement website in USA Today and in Macworld's US edition. The Macworld notice is to be no less than a quarter page, and in USA today it will be an eighth of a page.

We have advice for what to do if your iPhone gets water damaged here.

Follow Karen Haslam on Twitter / Follow MacworldUK on Twitter


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Karen Haslam

Macworld U.K.
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