The 2010 iPhone Insurance Scam

When the iphone4 was launched in the summer of 2010 there was a sharp rise in insurance fraud that was directly related to the new and desirable Apple handset, this fraud seemed to be well organised and ran into thousands of handsets and was so serious that it it forced some independent insurance providers to close the doors to new applications for their insurance product.

The basics of the storey went like this: Because the iPhone 4 was (and still is) such a high value handset, dishonest groups of people were making mass applications for online iPhone insurance plans, then within a few week to claim that they had lost or had their new stolen in order to get another new iPhone.

These days, when any handset is stolen, the IMEI number is blacklisted by all of the UK phone network providers, so a phone of any make or model will no longer work in the UK. However, reports show that these supposedly lost and stolen iphone4’s were being shipped and sold to other countries in the world, where the IMEI blacklist does not exist. It is anticipated that these ‘missing’ handsets could still fetch at least 50% of the UK retail value, so we are looking at over £300 per iPhone!

So, how the iPhone insurance scam worked; some folk were signing up for online insurance policies and selecting the pay monthly option, around £8-£9 some six months ago, then putting in the insurance claim after paying just one or two months premiums. Add the cost of the excess fee and one or two months premium together, you end up with a cost of around £60, for that they were receiving a brand new iphone4 worth £600-£700 at the end of 2010 and making £300+ for selling the handset they claimed had been lost or stolen.

This iphone insurance scam forced some insurance providers to withdraw their policy for the iPhone for several months whilst an answer to the situation was discovered towards the end of 2010.