UPDATE: CellHut disagrees with this version of the events, writing, “Mr. Laurence has played this dirty game to cheat small businesses and to get away from a sudden price drop on the iPhone, which are sold as final sale at Cellhut.com.” They threaten various legal hijinx.
Last Friday, I arrived home from work to discover a mysterious package waiting for me. Upon opening it, I found… trash bags. Lots of them. Puzzled, I rifled through the box and discovered, to my amazement, that they had been used as packing material for a brand new 4 Gb Apple iPhone!
At first I assumed that it was a gift from a particularly generous friend. As much as I would love to own an iPhone, I am not generally an early adopter and had no immediate plans to buy one.
Further exploration of the box revealed an invoice from a company I had never heard of called Cellhut.com. To my shock, the phone had been charged to my Chase Visa card to the sum of $663!
The credit card was one I rarely used, usually only for places that didn’t accept American Express. I had used it exactly twice at restaurants the previous weekend while on vacation in Montauk, Long Island. Someone had obviously gotten hold of my credit card number.
I immediately called Chase’s Credit Card department. They told me that the charge was pending, and I would have to wait for it to clear before they could do anything.
Next I called Cellhut.com (also located in Long Island… hmmmm) but was unable to get through to their voice mail. No help there.
A visit to their web site revealed this:
Notice the “interesting” pricing scheme?
I am a Mac geek. I use a Mac exclusively in my job as a web developer. I’m the guy people call when they have a Mac-specific problem. More importantly to this story, I set up and maintain the custom online Apple Store for the college where I work.
I knew bloody well that the 4 Gb iPhone was retailing at $499, not $849. That is, it was until Steve Jobs killed it off a few days earlier that week. And just about every man and his dog heard the howls of outrage around the country from early adopters as the price of the 8 Gb phone dropped to $399. In addition, they are bizarrely charging $100 less for the 8 Gb model!
The next kicker is the line “All iPhone sales are final **No Returns**”.
I then contacted Chase again and explained the situation. This time, they were far more helpful. I was able to cancel the card immediately. Fortunately, the transaction was still pending, and I was able to stop that as well. A representative from their Fraud Department told me that I would not be responsible for the charge, and that I should return the phone to the company.
Repeated phone calls to Cellhut.com over the weekend went nowhere, so I tried to get an RMA number from their web site. The site claims that there is a 15% restocking fee for returning nondefective products. I emailed their customer service, explaining the situation, and that I was planning to return the phone, but I did not expect to be invoiced for any “restocking fees”.
A few days later, I got a call from a representative from Cellhut.com, who claimed that the order had been placed over the phone on Sept 6th and verified by Chase. I told him that I had not made the call, that no one had called me to verify any charges and that my cell phone records show this. He said he would talk to his supervisor and email me an RMA. I had to give him my email address, as the one used for the order was fake.
A few minutes later, I received this:
Subject: CellHut.com RMA # 5731Dear Brad Lyons,
This email is in reference to your last purchase from CellHUT.com on Thursday, September 06, 2007 EST.
We are sorry to hear that the product you ordered is not functioning properly. Sorry for inconvenience. Your RMA number is 5731.
Please send the item back to us at the following address:CELLHUT.COM
RMA # 5731
275 7th Ave (Street Level)
New York, NY 10001Please send your order in its original packaging with the copy of the invoice and indicate the reason for return on the invoice. We recommend you to use service of UPS or FedEx, so that you have tracking number for the package. Please insure the package, because we will not be responsible for the loss or damage of the package.
We must receive the item within 3-4 business days to process your RMA. The RMA will be processed within 24-48 hours after we have received the item.
Problem solved, right!?
Not quite. Only a few minutes after the first email came this gem:
Subject: CellHut.com RMA # 5731Dear Brad Lyons,
This email is in reference to your last purchase from CellHUT.com on Thursday, September 06, 2007 EST.
RMA# 5731We are sorry to inform you that your RMA request is declined as it does not meet the Terms and Conditions of CellHut for an RMA to be issued.
Mmmmmmm-kay.
By now I was sick of this entire business, so I wrote them back:
I sincerely hope that this email is in error.Let me reiterate. I did not order this phone. I do not want this phone. It was apparently ordered with a stolen credit card number.
I have already contacted the fraud department of my credit card company and canceled both payment and the card.
To date, I have carefully documented every detail of my dealing with your company. If you do not accept return of this product, with no so-called “restocking fee”, I will file reports with the fraud department of my credit card company, the Better Business Bureau and the Office of the Attorney General.
In addition, I will contact the popular Consumerist.com web site and make sure every detail of your company’s practices are made publicly available to the entire Internet.
I await your response.
Sincerely,
Brad Lyons
Yeah, that’ll learn ‘em!
The next day, I returned the phone as per the instructions in the first email. Happy to be done with the whole ordeal, I sat down at my keyboard to find this sitting in my inbox:
Dear customer,
Before shiped any order we verify order by bank and customer, our rep talk to you about this order and you agree and also your credit card verify charge then we process this order and shiped.ok why sombody process a order with your stolen credit card and has shiping address to your home i really dont understand this. now you telling us you will go to BBB and fraud dept. there is no refund on this and no return on this.
thanks
alikhan
My response:
I did not verify any order. I had never even heard of Cellhut.com until the phone arrived in the mail. I certainly did not speak to any representative. Again, the order was made illegally with a stolen credit card number. I have explained this already over the phone.I have no idea why the phone was sent to my address. That motive is known only to the criminal who placed the order.
I have returned the phone as per the original RMA #5731 that was emailed to me. The tracking number is xxxx xxx via DHL.
That was yesterday. Today I received an email informing me that they have already shipped me another iPhone!
I can’t understand their behavior — the card they had on record no longer exists, so I don’t know how they plan to charge me. Can they bill me for a phone I don’t want and didn’t order? Has anyone else received an unordered iPhone from this company?
If the card has been canceled, they shouldn’t be able to charge you for any additional merchandise. Just to be safe, call Chase and confirm that the card is in fact canceled, and that no new charges are pending.
Call your Department of Consumer Affairs and explain the situation; state law governs whether or not you can keep the iPhone on the way as a gift for your troubles.
(Photo: AFP/Getty Images)
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Now, as far as the law is concerned, you do not need to return anything that you did not order, else, what’s there to stop unethical businesses from mailing you products that they can’t sell and charging you for them?
I’d refuse delivery of the second phone. If AT&T and Apple Stores are the only ones selling this phone than one could surmise that Cellhut is shipping stolen merchandise.
I’d also notify Apple and AT&T in case there are any shipments of product with serial numbers that align with what Cellhut is selling.
@spinachdip: I’m firmly in the make an honest effort to contact the company and offer them their merchandise back BUT if they don’t get their heads out of their asses, THEN it’s a souvenir of your ordeal.
My concern is that only using the theory of “unsolicited merchandise received is mine to keep,” what is to prevent two people in cahoots from “stealing” each other’s card info and ordering each other a bunch of stuff? Obviously there’s one’s ethics, and it’s fraud, but from the merchant’s perspective, it’s trouble.
The laws, as I see them, were designed to prevent unscrupulous merchants from taking advantage of consumers; taken to an extreme, it could be used by unscrupulous consumers to take advantage of merchants.
I think ethically the author of this inquiry did the right thing. Also, the FTC site linked to by wv.hillbilly above
[www.ftc.gov]
discusses “honest shipping mistake[s]” and what to do. I think this situation is reasonably similar.
To the posts about Cellhut selling stolen iPhones not being an authorized iPhone dealer: I’ve been assuming they bought them retail and are reselling them (hence the HUGE markup). I think this probably violates any agreements they had w/ AT&T to resell their phones & service, but I doubt a little thing like that would stop Cellhut.
I think it’s probably legal to do this (in as much as it’s legal to sell them on eBay), but it might mess up your warranty. Especially if you unlock.
I suspect some sort of stolen-goods-laundering scheme. Think about it: you have no way of knowing who is at the address they give you to “return” the phone you didn’t order. They may be gambling that people won’t take it up with the card company if they return the phone and have the assurance that all is well. So you send the phone off in good faith and by the time you do it, they’re in the wind and you have no proof of anything anymore. I suggest refusing any further deliveries from them, and having your credit card number changed and a fraud alert placed on the account. Reporting the company to ATT and Apple wouldn’t hurt, either.
Here’s a complete explanation of the scam:
[redtape.msnbc.com]
@Antediluvian: Despite my assholish response, I do agree with you. If you receive unordered merchandise, in error or through fraud, you should make an honest effort to return the merchandise.
I’d ask them to do what computer companies do, to send me a box, packing material and shipping label, so all I have to do is call UPS or DHL to come to my door. Failing that, I’d get a written promise to refund my shipping cost.
Otherwise, the reasonable assumption is that they just don’t want the merchandise bad enough.
“Dear customer,
Before shiped any order we verify order by bank and customer, our rep talk to you about this order and you agree and also your credit card verify charge then we process this order and shiped.ok why sombody process a order with your stolen credit card and has shiping address to your home i really dont understand this. now you telling us you will go to BBB and fraud dept. there is no refund on this and no return on this.
thanks
alikhan”
Sounds like ‘cellhut’ is an apt name.
I had the same weird thing happen a year or two ago. Someone ordered a laptop with my credit card. The thing was, I’d not used the credit card in maybe a year, and it was HP that was the vendor.
We sent it back, and I called the card company and had it changed. But was trying to figure out why someone would order me a laptop.
I’m wondering if the “bungled CS iPhone” being shipped to you right now is one that’s been paid for by SOMEONE ELSE’S CC?
You can return it to me! Email me and I’ll send you my address.
I wonder if this story is related. [redtape.msnbc.com]
I would be interested to know if he missed a call from CellHut. Or if CellHut ever tried proactively contacting him around the time of the delivery.
If CellHut or alikhan can’t grasp the fact that this was a scam, they’re not entitled to run a business. I’d keep the 2nd iPhone because everything that had to be done was done.
You may want to check out this:
[redtape.msnbc.com]
Just how much did Mr. Lyons spend sending the iPhone back to these people through DHL? CellHut has been provided with all of the information that they need to know that they should not send another iPhone. If they do go ahead and send another one, which I highly doubt, I see no reason why Mr. Lyons shouldn’t keep it.
After the hell you’ve been through, I’d say keep the damned thing. In the past I’ve had stuff like this happen and just refused the box (UPS and USPS both take it back without a hiccup, haven’t tried it with fedex yet), but you went above and beyond to please these pricks. The FTC page seems to be 100% behind your keeping it as a gift.
I had something similar happen to me back in April. Went out to eat and paid using a credit card which I haven’t even pulled out of my desk drawer in over eight months.
I check my statement online a couple of weeks later and I have three purchases from three different online retailers, all under 20 bucks.
I immediately called the credit card company and disputed, and they were reversed. Within the week, the merchandise I “bought” arrived in the mail. I could not understand why someone would use my credit card number to buy stuff and have it shipped to me.
When I called to get RMAs, all three of these purchases were enrollments in a club of sorts… where my card would be auto-billed each month and they’d send more product. (Think Proactiv)
CSR did some research and a REALLY phony email was given during purchase and all of these were done to fulfill one of those “Enroll in Netflix, Columbia House, Coffee of the Month Club and 17 Magazine Subscriptions and We’ll Send you a FREE iPod!!!!!” deals.
Canceled the card, sent the merch back, no problems yet.
Interesting that “Cellhut” still shows iPhones for sale, 4gb iPhones for the low low price of $599 each, but of course they’re billed as “unlocked.”
Maybe they’re making money off lazy people, since as far as I know you can’t buy iPhones online from AT&T or Apple.
At least the address given in the e-mails matches the domain info:
Registrant:
Cellular Hut
275 7th Avenue
New York, NY 10001
US
Domain Name: CELLHUT.COM
Administrative Contact:
Bhasin, Bawa mailto:info@cellhut.com
Cellhut.com
275 7TH AVE
NEW YORK, NY 10001-6708
US
(212) 989-888 fax: (212) 675-8017
Even if cellhut isn’t in on the scam, they still sound incredibly sketchy. Alikhan’s terrible grasp of the english language is a red flag to me.
@GearheadGeek: You can’t buy unlocked iphones from Apple or AT&T, but you’ve been able to buy iPhones from Apple online since June 29.
@Dick.Blake: That’s an interesting twist to the scam (using stolen cards to enroll in “pyramid” programs. I’d also think it would make it a lot easier to track the offender down.
Just to be on the safe side of things, you may want to make sure they didn’t set up an AT&T account for you while ordering this thing (if you don’t alresdy have one). I find it unlikely that they would sell and ship this thing unactivated. Check with AT&T and make sure an account wasn’t set up in your name under your SSN. You’ve already been the victim of one kind of fraud. It’s not inconceivable that someone also opened a AT&T/Cingular account under your name.
@cypherpunks:
I hope no company ever shits me a product. Funny typo.
Actually i just thought I’d plug LetsTalk.com . I and several people I know have been more than satisfied with the service and products from them.
I wouldnt get so worked up about it. You already canceled the card, and the charges were reversed. If they dont want the phone back, keep it. Free iphone! Or better yet, you can ship it to me, i could find some use for it!
I bought a Sirius Stiletto oneBay last spring, received it on a Friday, no problems. The next Friday, I come home from work and there is a package from the same retailer I bought the radio from. Open the box, and it’s another Stiletto, exact same one. My wife tells me to keep it, but I called the guy to let him know. He puts me on hold, comes back a minute later to tell me he had no idea what happened. He appreciated me calling him, e-mailed me a return label, and since I left it in the box with all the packaging, I sent it on its way. I figured that since I would expect a company to make it right if they made a mistake, it would be good karma to do the same. OP should keep the phone, since CellHut sounds like it’s not on the level.
I also think Cellhut.com is in on the scam. Alikhan’s e-mail reads like it was sent by a 419 scammer.
But for me the kicker is this: Today I received an email informing me that they have already shipped me another iPhone!
In what universe does it make sense to send another phone? It’s not like they got paid for the first one.
The person who ordered the phone and had it delivered to your home may have been trying a call tag scam. Basically, the scammer orders something with a stolen card and has it sent to either the cardholder’s address, or an innocent person’s address. After it is delivered, they call pretending to be the company that sent it and say it was delivered on accident, and they will have the shipping company come and pick it up. A different shipping company than the one that delivered it comes and picks it up, and it goes to the criminal instead of back to the company.
From the way it sounds cellhut may have stolen your credit card to do a few things and seem semi legit. First it sounds like they used your credit card to buy a product from their “company” at a higher than normal price. Then they ship you the product only to have it returned to them. Either way they win because they get the difference in actual cost of the iphone and what they charged and if you send the iphone back they get that too.
Eh, just keep it and file a chargeback on any charges. If they complain you stole it you have proof that you tried. Oh, and refuse to pay the charges to ship it back. Why should you pay for something you didn’t order?
This could be agood thing (at least in Wyoming). Technically, you have completed the first transaction, albeit fraudulent, and that is done with. However, they have sent you a second phone. In Wyoming, this is considered a gift since you did not order it, and as such you are legally able to keep it, free of charge.
@ANTEDILUVIAN
@anyone who thinks that the second phone should not be a gift.
This person sent back the phone that he was fraudulently charged for. They’re sending him a second phone against his wishes. This means that they’re sending him an unsolicited item in the mail, which means that he can (according to the FTC) take said item as a gift.
Let me reiterate: The SECOND phone is the one that is unsolicited. The first phone was fraudulent and he made a good effort to inform these idiots about that fact. It’s not his fault that they screwed it up and he definitely deserves at LEAST a free iPhone for his troubles.
I agree re: gift. Even if the box sits and collects dust at the door next to your umbrellas, why should you have to spend more of YOUR TIME dealing with it?
You already took the time doing what you were supposed to do. F-em.
you’re luck you’re in New York… The Attorney General will fix this quickly. They have a form you fill out to file a complaint, and presto — your problems disappear. The AG in NY has the power to revoke business licenses, so companies tend to listen to them.
From the ResellerRatings.com entry:
7/17/07 11:50 AM
WORST ONLINE EXPERIENCE….. EVER!
If I knew trying to return an item would be this difficult, I would have been MORE then happy to spend an extra $100 some place else.
After submitting an rma request to: “return@cellhut.com”, a rep by the name of ALI (ali@cellhut.com) after 2-3 days later… replied to my request and stated:
Dear customer,
plz make rma request at return@cellhut.com
I could have just sworn that I JUST DID THAT?! The least “ALI” could have done for me was point that request in the right direction… OH WAIT… it WAS in the right direction!
@Bryan Price:
Thanks for posting that. I never noticed the login boxes at the top, and I’d been under the incorrect assumption that my account had been plonked.