Class Calls IPhone Loyalty Upgrade a Sham

Share this post
Share on Google+Tweet about this on TwitterShare on Facebook

     SAN JOSE, Calif. (CN) — Days before Apple’s iPhone 7 even hits stores, one of the company’s customers sued the smartphone manufacturing giant, saying it broke faith with its most loyal customers in its quest for a greater market share.
     Emil Frank, a Brooklyn resident who bought the iPhone Upgrade Program, filed a class action in federal court on Monday claiming that Apple is not living up to the promises it made customers who purchased the program.
     The program, unveiled in 2015, promised Apple members the opportunity to upgrade to annual new versions of the iPhone as long as certain conditions were met — in this case 12 payments within 6 months, according to the complaint.
     “The iPhone Upgrade Program offered Apple’s biggest fans and most loyal customers a way to make simple monthly payments in exchange for the newest iPhones, with a promise that ‘every year’ the customer would be able to trade in last year’s iPhone and receive the newest version of the phone,” Frank says in the complaint.
     However, when Apple made their latest smartphone, the iPhone 7, available on Sept. 9, the upgrade programs customers were prevented from selecting the product of their choice and were instead directed to various stores that had what Frank describes as an artificially low inventory.
     “This is not just a problem created by the limited supply of the newly released iPhones,” Frank says. “Rather, Apple intentionally limited the inventory available to iPhone Upgrade Program customers (who are already contractually locked into making monthly payments for their old devices) to capture sales from new customers who weren’t already part of the program.” [Parentheses in complaint.]
     Some of the upgrade program customers have been told to wait until November, while new customers purchasing their phones through Verizon or AT&T were able to purchase new phones long after the upgrade customers were told inventory was low, Frank says in the complaint.
     Frank woke up at 2:45 a.m. on Friday in eager anticipation of procuring the iPhone 7, the complaint says. However, after he was diverted to the procurement process specific to upgrade program customers, it became apparent that no phones were available in New York City.
     Expanding his search to Albany and Buffalo, and then eventually to stores as far away as North Carolina, Frank says he was unable to locate the device of his choice.
     Apple is violating the promise of its program by making its customers pay for outdated phones while they wait for inventory to catch up, Franks says. This will create even further delays next year, as customers have to make 12 payments on one phone before qualifying for the upgrade, according to the lawsuit.
     “For these customers, having quick access to the latest technology is the very reason they signed up for the program in the first place,” Frank says.
     Frank says he and other customers of the upgrade program are victims of a breach of contract and that the implementation of the iPhone Upgrade Program was deceptive.
     He seeks punitive and compensatory damages.
     An email sent to Apple requesting comment was not returned as of press time.