Singing the grey imports blues

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By Wendy Knowler

Pretoria - If you’re among those desperate to get their hands on the new Apple iPhone 5, be aware that if you find one at a seemingly good price, it may well be a “grey” phone.

On the day the iPhone 5 was launched in South Africa – December 14 – Apple devotee Clayton Sing spent the day driving around trying to buy one for cash, as he’s a pre-paid cellphone subscriber.

He was offered one at the Altech Autopage Cellular branch in the Nicolway Bryanston mall, but as they didn’t have the handset in Sing’s preferred colour, he was referred to the Altech Autopage branch in Sandton City.

And that’s where he bought his 16 KB iPhone, paying R8 799 in cash.

Only when he got home did he discover that the phone was “an American import”.

“There was no South African charger,” he said. “And while using the phone on holiday in Durban, the phone kept going to a white screen.

“After restarting it, the problem went away, but by January 8, the white screen problem had become permanent.”

So he returned the phone to Altech Autopage in Sandton City, where, he says, he was told that Consumer Protection Act allows consumers to return defective goods for a refund within seven days, not six months.

(Many cellphone outlets seek to deny consumers their CPA rights in this way. The act’s “implied warranty” on goods sold is indeed six months, and should they malfunction in that time, consumers may choose their remedy: refund, replacement or repair.)

Sing was told his phone would not be replaced, and made to fill out a “repair order”, but he refused, knowing his CPA rights.

A grey phone – also known as a parallel import – is not a fake.

It’s an original, genuine product – it just wasn’t intended for sale in this country.

These handsets, along with other grey goods – mainly electronics – are imported, legally, via non-authorised channels and if you buy one, you don’t have the benefit of the manufacturer’s warranty.

Sing then approached Altech Autopage’s head office, where the serial number of his phone could not be traced. “The consultant disappeared for a while and then came back to me to say the phone was a grey import and because of that, even if I had signed that repair order, they wouldn’t have touched the phone.”

By the time I got involved, an Altech Autopage representative had made contact with the Sandton store and presented Sing with two options: a new grey unit from that store, or an iPhone imported via the local, authorised channels, for which he would have to wait.

Sing chose the latter option.

Importing and selling grey goods is not illegal in South Africa, but it is illegal not to inform consumers that they’re buying grey goods, because they have a right to know – before they part with their money – exactly what they can expect in terms of after-sales service.

The Consumer Protection Act compels suppliers to disclose to consumers – by means of a “conspicuous notice” in adverts, on packaging and on websites – when goods have been imported without the approval of the registered trade mark owner.

And store staff are required to “expressly” draw attention to the fact that goods are grey imports.

Most importantly, the implications of this have to be spelt out.

CPA regulations state that consumers must be told that the goods “have been imported without the approval or licence of the registered owner of that trademark and that no guarantee or warranty in respect of such goods will be honoured by any official or licensed importer of such goods”.

Speaking on behalf of Altech Autopage Cellular, sales director Jacinto Frazao said in terms of the company’s policy, customers are informed in store that they are purchasing an imported unit “and sign an addendum… outlining the terms of the warranty and guarantee”.

He confirmed that Sing’s case had been “solved”, adding that the company would issue the franchisee with a disciplinary notice for not following the protocols and policies outlined in its agreement with Altech Autopage Cellular.

“The disciplinary notice will be followed up by spot-checks for the next six months to ensure that this error is not repeated,” Frazao said.

He revealed that Asif Casoojee, the Altech Autopage Cellular Sandton and Nicolway franchisee, is also the owner of cacell.co.za, which sells cellphones online.

That company’s website punts the iPhone 5 as marked down from R11999 to R8295, but makes no specific reference to the fact that the phones are grey imports.

The only clue lies in the word “our” in the following paragraph, posted in the iPhone 5 section: “All cellphones purchased from CaCell are brand new and are covered by our 1 Year Warranty unless otherwise stated.”

Many grey phone merchants offer their own warranties and operate their own repair centres; some send faulty phones to authorised repair agents overseas at an extra cost, and others have them repaired in local repair shops.

But unless this is clearly spelt out, an unsuspecting consumer could well assume the warranty referred to is backed by the manufacturer locally and only finds out that this isn’t the case when they need to claim on the warranty.

Given that the CPA regulations regarding disclosure of grey phones, and the warranty implications, appear to be being widely disregarded in South Africa, if you’re paying cash for your handset, or getting a special deal, ask specific questions about this grey issue.

FNB iPhone stock now non-grey

Working on this story got me thinking about First National Bank’s iPhone 5 offer, announced mid-December. Are those phones grey imports?

I asked, and the bank’s Head of Smart Device Products at Core Banking Solutions, Kartik Mistry, said while FNB had “procured limited grey iPhone 4S stock” to meet customer demand for its offer, “all our iPhones now, including iPhone 5, are non-grey stock”.

Good to know. But did it disclose the “greyness” of that 4S stock at the time, I asked.

There was certainly no mention of that fact in the media release at the time.

My answer: “The warranty is covered by Brightpoint, a wholesale distributor.” - Pretoria News

consumer@knowler.co.za

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