- October 20, 2016
- Posted by: Kerry Tomlinson, Archer News
- Category: Archer News, Mobile Devices, Posts with image
Will unhappy customers get their devices back—or maybe even refunds for their phones & laptops?
Boxes and boxes of used phones, sent by mail, are stacked in a warehouse cart.
Investigators snapped a picture of some of these unopened packages when they took over and shut down Laptop and Desktop Repair in Sparks, Nevada, on September 29.
The company claimed you could get top dollar for your used tech, but did not come through, according to thousands of customer complaints.
The phones piled in the cart may belong to customers who sent them in through the company’s many sites, like Cash For iPhones, Sell Your Cell and eCycle Best.
“They have BOTH my phones!” said a worried customer on SiteJabber. “They are thieves!!!!
“This is an absolute SCAM!” wrote another.
The question now—can customers get their phones and laptops back, or money to make up for the devices they lost?
The answer may come down to timing.
Melissa Williamson sent in her iPhone 5s 16GB on August 13, with the promise of $67 in return.
The phone was in good shape, she told Archer News, but the battery would not keep a charge.
She called the company about two weeks later.
“That is when the woman who answered told me they were only going to give me $5 because the phone had severe damage and wear and tear,” Williamson said. “That was erroneous information and I told her that.”
But that was Laptop and Desktop Repair’s sneaky tactic, according to the Federal Trade Commission—make big claims, then send out just a fraction of the promised money.
“After I asked for my phone back and told them they were a rip-off, they gave me $20 more and told me my phone had already been recycled,” Williamson said.
She was lucky, in some ways. Other customers said they got far less.
One reported that the company promised her as much as $433 for an almost-new phone, then offered a payout of just $34—and the check bounced.
“They are scamming people out of high-priced phones, that’s for sure,” Williamson said. “I am not anticipating getting my phone back or additional money.”
Inventory at Laptop & Desktop Repair’s warehouse in Sparks, Nevada. Image via Hays Financial Consulting
Where are the phones?
The company that took over Laptop and Desktop Repair for the FTC, Hays Financial Consulting, said employees told them the laptops that come in get dismantled and sold for parts, and it’s a slow game.
But the phones, they said, move quickly—sold off on eBay, Amazon or other web sites at the rate of 150 to 250 a day.
There is a good chance that Williamson’s phone, sent in six weeks before Hays Financial Consulting took over, is gone. Someone, somewhere, may have bought her iPhone 5s online and is using it right now, unaware that it was obtained through “deceptive trade practices,” according to the FTC.
People who sent in phones later, however, may have more of a chance.
Still at the warehouse
Customer Vel V. writes on SiteJabber that she mailed in two phones on October 5—six days after the company closed its doors.
Hays Financial Consulting said it has stopped accepting packages for Laptop and Desktop Repair. In theory, Vel should get her phones back.
But customer Justin T. says he sent his two iPhones in just before the shutdown.
That’s where things get more complicated.
Did they open the box?
If Justin’s phones are among the many unopened packages sitting at the warehouse, there is a chance he could get his phones back quickly. Hays Financial Consulting said it can still refuse delivery for a number of unopened boxes.
But if employees already opened his packages, the timeline may slow dramatically.
Investigators found hundreds, if not thousands of used phones in Laptop and Desktop Repair’s warehouse, according to the Receiver’s First Status Report. The company’s owner, Vadim Kruchinin—aka David Kruchin—claimed to have $1.5 million worth of inventory.
Inside the Laptop & Desktop Repair warehouse on September 29. Image via Hays Financial Consulting
How to find them
The good news: the phones in that potentially massive inventory are trackable.
Employees said they put each piece of used tech into a bag and assigned it an ID number, according to Hays Financial Consulting.
“These employees advised the Receiver [Hays Financial Consulting] that a bar code reader could be used to easily obtain information about each product,” the receiver’s report said. “It did appear to the Receiver that the Receivership Defendant [Laptop and Desktop Repair] kept accurate and detailed records of its inventory.”
Problem solved? No.
These phones may belong to someone else, according to the law.
Phone processing area at Laptop & Desktop Repair’s warehouse. Image via Hays Financial Consulting.
The numbers showed Kruchinin’s company—despite its allegedly deceptive tactics—appeared to be in a “death spiral,” according to Hays Financial Consulting.
The company had taken out almost a million dollars-worth of loans, owed more than half a million dollars-worth of credit card charges, and was behind on paying wages to its workers, the Receiver’s First Status Report said.
That means the lenders may lay claim over the used tech customers sent in, because the company owes them money.
Hays Financial Consulting said it believes that the phones and laptops should go back to the customers allegedly tricked out of their devices, but “this determination may be disputed by secured creditors holding liens against the inventory of the Receivership Defendant [Laptop and Desktop Repair].”
“The Receiver [Hays Financial Consulting] would like to engage in an orderly disposition of this inventory, but cannot do so until the extent and validity of liens against the inventory are addressed,” the report said.
Unopened packages at Laptop & Desktop Repair’s warehouse. Image via Hays Financial Consulting
When will Hays Financial Consulting know?
“We’re kind of in a holding pattern right now,” Dwaine Butler of Hays Financial Consulting said, adding that the company may have some information soon.
Customers are in a holding pattern, too. Some want to know what will happen, not only to their devices, but to the people who created this multimillion dollar scheme.
“Well, they definitely should have some type of theft charges brought against them,” said Williamson. “They should also be made to pay back anyone they scammed.”
The FTC may be able to order restitution, or payback, for victims. But if a defendant has no money or assets, it may be hard to make him or her pay.
“I am glad they got shut down,” Williamson said. “But unfortunately they will just open another company under a different name and continue to do what they do best: steal from others.”