Apple has reportedly agreed to pay $53 million as a settlement for a class action lawsuit involving liquid damaged iPhone and iPod devices. The complainants alleged that the company relied on faulty indicators to check if the devices came in contact with water and to deny them with their warranty claims.
The settlement is expected to be filed at the San Francisco federal court in the following weeks. There will be cash payouts made to hundreds of thousands of iPhone and iPod Touch owners whose one year standard or two year extended warranties were not honored by the company.
The liquid damage policy of Apple states that “If an iPhone or iPod has been damaged by liquid (for example, coffee or a soft drink), the service for such liquid damage is not covered by the Apple one year limited warranty or an AppleCare Protection Plan (APP). iPhone and most iPod devices that were built after 2006 have built-in Liquid Contact Indicators that will show (as described below) whether the device has been in contact with water or a liquid containing water.”
The class action lawsuit was first filed in 2010 by Charlene Gallion “on behalf of herself and others similarly situated.” Consumers involved will be eligible to around $300 depending on the device they own and how many people make the claim.
“According to several lawsuits combined in San Francisco, no matter what the problem, Apple refused to honor warranties if a white indicator tape embedded in the phone near the headphone or charging portals had turned pink or red. However, the tape’s maker, 3M, said humidity, and not water contact, could have caused the color to at least turn pink.”
iPhones that were denied warranty service before Dec. 31, 2009 and iPod Touches that were denied before June 2010 due to Apple’s liquid damage policy are eligible for the settlement which is still pending court approval. The affected devices includes original iPhone, iPhone 3G, iPhone 3GS and the first, second and third generation iPod Touch. Attorneys representing the case are eligible for 30 percent of the total amount the company will pay.
Noreen Krall, Apple’s chief litigation counsel, already signed the settlement. Apple however has denied any wrongdoing.