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 # 5731

Dear 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 10001

Please 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 # 5731

Dear Brad Lyons,

This email is in reference to your last purchase from CellHUT.com on Thursday, September 06, 2007 EST.
RMA# 5731

We 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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