Computer, Phone Makers Should Face Prosecution for Fraud


By Tim Coco

It’s about time technology executives and board directors face criminal charges for committing a disproportionate share of America’s consumer fraud.

Few consumer protection lawsuits have been filed against companies like Apple and Microsoft even though those companies release products that, at times, simply don’t work. If you buy a new toaster, for example, you wouldn’t be expected to have to take it apart and move wires around in order to brown your favorite morning bread. Yet, the software equivalent happens everyday with that computer on your desk or so-called smartphone in your pocket. Every consumer protection advocate would go after companies for selling defective $10 toasters, but few go after manufacturers of those $1,000 paperweights.

The reason is the tech industry thrives in your insecurity.

Calculated efforts to convince consumers they have pushed a wrong key or otherwise are too inept to operate their devices have kept executives out of jail. In fact, U.S. Justice Department prosecutors and state attorneys general are apparently so intimidated by these tactics that they fail to bring charges.

The job has been left instead to consumers who have been forced to file class action lawsuits. In the last year, for example, a lawsuit was filed against Apple for “misrepresenting its iOS 8 operating system upgrade by using an ‘unexpectedly large percentage’ of storage on 8- and 16-gigabyte devices,” according to Neil Hughes, writing for AppleInsider

Maybe peddlers of these high-tech devices could pull off that scam when products were considered “experimental” (maybe back in the early 1980s), but now it is blatant consumer fraud, which should be prosecuted by attorneys general across the U.S.

Apple’s arrogance was on full display last year when it’s iOS 8 update caused wifi on older iPhones to stop working—an occurrence derisively named “WiFried” by users. Unsuspecting consumers found hundreds of dollars in data overage charges from providers like Verizon and AT&T—virtual co-conspirators who profited from the windfall. They, too, should be prosecuted to the fullest extent of the law.

As Forbes’ Gordon Kelly reported earlier this year, “Owners of older iPhones and iPads continue to suffer a myriad of problems with iOS 8 and Apple is starting to give the distinct impression it would rather ignore them and move on.” As evidence, Kelly goes on to report, Apple “bizarrely chose to ignore the major Bluetooth, WiFi, battery and calendar problems” in a software update.

Problems aren’t limited to iPhones. Whitfield Bryson & Mason LLP filed a class action suit against Apple on behalf of California and Florida consumers who “purchased 2011 MacBook Pro Laptops with AMD GPUs who experienced graphical distortions and system failures.” Many users also experienced problems connecting to work networks after Apple released its Yosemite operating system update last year. Apple belatedly addressed the problem, in part, by quietly replacing “discoveryd” with its earlier networking technology “mDNSResponder.”

Microsoft similarly faced a class action lawsuit when owners of Xbox 360 consoles found the device “scratched their game discs,” according to John Callaham, writing for Windows Central last July.

The veil of protection from lawsuits against individual company board members also must be removed. Directors are not merely innocent investors, but rather profit, for example, from Apple’s apparent decision to scoff at consumer protection laws. Reuters reported Apple directors received $127,000 per meeting during a recent period. Directors who are supposed to oversee rogue executives fail to do their duties, perhaps fearing they’ll lose this lucrative stipend if they become troublemakers.

Private sector class action lawsuits do not offer solutions to users living outside of the states where such suits are filed. It’s time for the U.S. Justice Department and state attorneys general to enforce consumer protection statutes.

Note: WHAV staff members have been particularly disadvantaged by problems with such Apple products as iPhones, MacBook, Mac Mini and iMac.

3 thoughts on “Computer, Phone Makers Should Face Prosecution for Fraud

  1. I hope Tim Coco isn’t a Democrat.

    Of course, we all know where iGadgets are made right? Using slave labor right? All those Democrats that voted for NAFTA to allow Apple to send all those jobs to China right? All those leaders in unions screwing over their own members by supporting said politicians for screwing them over right?

    Oh wait, that’s would-be free markets, nothing to see here, except the economic destruction of The American People so they can have a cool iGadget.

  2. Tim, Apple has no legal mandate to update older iPhones, Macs, etc. If the computer or phone worked well with its original hardware and software that is all that is required. Updates from Apple are free of charge and you decide if you want to update or not. That is not fraud. You can usually expect a ‘new’ Apple product to be able to update for 3 years without problems. After that you need to check if your phone/computer is on the list as appropriate for update. I have a 15 year old iMac that still runs quite well but I can’t update it to El Capitan. That isn’t Apple’s problem and I don’t see it as a problem either. Also there is an Apple store 10 miles away in Salem NH. If you have a problem with an Apple product make an appointment and take your item there for a consultation and possible repair. I have done that several times and had my problems resolved in 20 minutes free of charge. I can’t speak about Microsoft because I don’t use their products.