'Mules' recruited online to return fake iPad 2s
Fraud artists perpetrating a major scam involving fake iPad 2s recruited unsuspecting "mules" online to return the bogus products to major retailers, CTV News has learned.
Mounties in British Columbia say scammers put marketing job listings on Craigslist and hired people to return the fake Apple tablet computers to big box stores under the guise of a "mystery shopper" assignment.
"In some ways it's the perfect scam because it involves using unsuspecting mules to go conduct an anonymous, secret customer service test and that mule has no idea they're being used to commit a fraud," Insp. Tim Shields told CTV British Columbia.
The computers are bought with cash, swapped out for hunks of clay, and then resealed and returned for a full refund. The fake products are then placed back on the shelves and resold to unsuspecting customers, including five people who have spoken with CTV News.
The scam has hit electronic giants Future Shop and Best Buy, as well as Wal-Mart and London Drugs locations across British Columbia.
Shields called it a triple scam.
"They are not only looking to defraud the big box stores but also looking to defraud innocent victims who would then be the fall guy and who could possibly end up getting arrested for committing the fraud. So completely unfair, it's cold, it's heartless," he told CTV B.C.'s Steele on Your Side.
Police say one job-seeker was hired in late December by an Asian man who identified himself as Jack. They met in a Starbucks to discuss his purported customer service job.
The unnamed man was tasked with returning a wrapped iPad 2 to a Best Buy store in the Vancouver-area, get a $600 cash refund and then assess the level of customer service he was given. It was on his third iPad return for Jack when the scam was uncovered.
"The third time around, the male walked into a Future Shop and this time the Future Shop staff unwrapped the iPad and saw that there was no iPad inside -- it was in fact a piece of clay," Shields said.
The man left the store and alerted police, who are now actively involved in the investigation. Mounties are urging any other people unwittingly hired as iPad mules to come forward and help solve the crime.
RCMP admit they still don't have a clear description of who is responsible, because surveillance footage at the individual stores may capture footage of mules returning the bogus products, not the actual suspects.
Police are working with the man who reported the fraud in hopes he can aid the investigation. It's still unclear whether it's a single person involved or a small group of people.
Shields said this is the first time police have heard of a scam where a completely innocent person who was just looking for a job is being used to commit frauds without their knowledge.
"It just goes to show you how creative some of these fraudsters are," he said.
Future Shop, Best Buy and London Drugs have changed their return policy when it comes to iPads in the wake of the frauds. Returned packages will now be opened before going back on the shelves, and Future Shop says it will now only stock factory-direct iPads from Apple.
London Drugs has been hit with four of the frauds. President and CEO Wynne Powell said there was absolutely no indication the returned fake iPads had been opened or tampered with.
"This is one of the most professional skilled repackaging jobs we've ever seen," he said Thursday. "This is a very professional group."
Wynne said the company is now working with RCMP investigators.
"We're combing the many hours of video surveillance right now to see if we can provide the police with any images of the people that returned these iPads," he said.
Rod Stushnov, who bought one of the fraudulent computers from a Future Shop location as a Christmas present, said the fraud ruined his holiday.
"We were away for the holiday and decided to cut our trip short and return to deal with the issue. Fortunately for us we had no problem with the return but the thought did cross our minds that we might get accused of stealing the unit ourselves," he said.
His experience is quite different from Surrey resident Mark Sandhu, who said he was treated like a criminal by two managers when he tried to return his fake device to Future Shop on Boxing Day. He has since been given a full refund, an apology and a new iPad 2 after coming forward to CTV with his story.
Jeff Rae said staff at his local Best Buy immediately offered him a replacement when he returned the hunk of clay he had mistakenly purchased.
"I left by saying I probably won't be the last person they see with this, and the manager said that unfortunately, I was probably right," he said.
Since its release in March 2011, Apple's iPad 2 has become the most popular tablet computer on the market, dominating its competitors, including the BlackBerry Playbook.
Apple has refused to comment on the case.