"Refurbished", Warranty, and Insur. Replacement Cell Phones
Having been in the industry for 18 years and now solely operating an Independent Cellular Phone Repair/Refurbish store, I would like to shed some light on my end of this discussion.
As far as the Cellular Industry is concerned, this is probably one of the most scamming areas in what has become a shady Industry. I believe one of the writers here stated "It depends on the refurbisher"; this has never been more true; and the larger the company it seems, the more likely to be scammed. Let me explain.
The first ten years of my cellular career was spent mainly in the activations end. I've done well over 15k new activations, and as many upgrades. When insurance started being offered in the mid to late 90's, it was done through a company named Lockline. At first it was a great program. Customers were FedExed their replacement phone, sometimes overnight. Somewhere around the late 90's we started noticed a lot of problems with these warranty and insurance replacements; at times the replacement phone had MORE problems than the original phone sent in. Somewhere around 1998 or 1999 I found out why. As a major SP (Service Provider) Dealer, if I sold a customer a new phone on a new activation, the customer had 30 days to return it through me. One way to return it was called "Buyer's Remorse". This meant the customer did not like the phone, or decided the SP was not right for them. Originally the phone had to have less than 30 minutes on the Talk timer, but later this was not a variable. Either way with Buyer's Remorse, me the Dealer had to fill out a one page form, check Buyer's Remorse and show it was returned within the 30 day limit. We then sent the phone back and received a refund back into our equipment account within the next 30 days; thus not offsetting the all important Equipment to Commissions balance (Commissions were paid on the previous month. HOWEVER, if the phone had any kind of a technical problem, we had to fill out up to a 5 page report, show dates and times we contacted the SP's Tech Support, and exactly what we did to try and fix the problem. I believe we originally had to try various (Ridiculous) solutions and WAIT 24 hours in between each solution to see if it fixed the problem. Once we were granted the Return, we boxed it up with an RMA (Return Merchandise Authorization) number given by Tech Support and then didn't get our funds put back in our equipment accounts for 90 days; most of the times it was much longer. Knowing these two scenarios, what do you think most Dealers (Including myself I must say) stated the situation with the phone was? That's right, Buyer Remorse; even the phones with obvious problems. It was my theory that the SP would give these Buyer Remorse phones to the Insurance Company (Lockline) and Lockline would not even check them out and send them out as replacement phones for warranty and insurance. It wasn't until 1990; I actually had a good customer of mine come in with her "New" replacement phone having a very distinct problem I noticed a few months earlier and sent in as a Buyer's Remorse return. Sure enough, I checked the ESN and it was that exact phone. This happened at least two other times. Because of the SP's policy, the Dealer was forced to send ALL phones in as Buyers Remorse or we would be forced to float thousands of dollars we didn't have, up to 6 months. Because Lockline was such a sham, they didn't even bother to check the phones out. They would look on the outside, replace any housing that needed replacement, put new LCD and Housing protective tape on it, and send it out to the Customer. When the customer got the phone, they were under the assumption it was a brand new phone. Meanwhile, they got a broken phone that was never fixed.
With the amount of "New" Refurbished phones I have coming into my repair shop that were just sent out through the insurance company OR warranty company to unsuspecting customers, I have NO reason to believe this practice has not changed, only perfected. I have seen customers forever curse whole model lines because the phones "Suck" or "It was the worst phone ever" when all it was was a broken phone being sent each time. Merely replacing a housing is the LEAST important part of refurbishing a phone; but it is the cheapest. IT an industry wide practice by most refurbishing companies except the "Old School" smaller stores such as myself who have a reputation to uphold and can't handle a lot of rework, and return, volume; but ONLY if that small store does their OWN bench work and refurbishing. I have also seen a lot of these smaller companies just simply wipe down the phone and call it refurbished; meanwhile the mother board has water damage, physical damage, high hours(Another VERY important variable you must know on any refurbished phone, how much prior use it had), or a combination of all three.
After awhile the largest Dealers such as myself, complained so much about Lockline, the major SP's (Who all used Lockline) finally got rid of them in 2004-2005. They brought on a new company called Asurian. "Asurian was going to change everything and get it right" They told us. Soon we noticed the same **** different company. Nothing changed. I then took it a step further and wanted to find out more about this new company Asurian. I looked through the Wall St Journal online and in other places. Asurian, as it turns out, was an LLC (Smart, because Lockline was getting sued a lot by customers). As I delved deeper into this mystery I discovered the obvious; Asurian was owned by a different company. You guessed it, Lockline. Nothing changed and I still see it today. If this is the largest refurbisher in the country, with contract with all the big SP's, what do you think the smaller companies are doing to keep up? Like I said, This is the biggest scam in an already shady industry; you just have to be an "Old School" Tech to know it. Caveat Emptor, let the buyer beware, is alive and well in the Cellular Industry.
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