Customers who lost money pre-ordering their iPhone 6 through bankrupt Phones 4u to receive modest refund

Customers who lost money pre-ordering their iPhone 6 through bankrupt Phones 4u to receive modest refund
Perhaps “modest” is not the right word. The British indirect agent and cell phone retailer abruptly closed all 720 of its locations after losing carrier agreements with O2, Vodafone, and EE.

That closure occurred just before the release of the Apple iPhone 6 and 6 Plus, but within the pre-order window for carriers and retailers. Thousands of people pre-ordered the new devices through Phones 4u, and subsequently never received them because the company entered into “administration.”

By going into what is the equivalent of bankruptcy proceedings in the United States, Phones 4u essentially laid off 5,500 employees and brought in a consultant to position assets for sale. That administrator, in this case PricewaterhouseCoopers (PwC), would also manage the proceeds from asset sales to settle debt obligations with creditors.

Some of those proceeds were abated through arrangements made with EE and Vodafone who agreed to take over some of the Phones 4u retail locations and their staff. Phone 4u’s main competitor, Carphone Warehouse, picked up some of the kiosk locations and those locations. That still left more than 365 locations and over 3,300 employees swinging in the wind, however.

Such settlements are usually pennies on the dollar (or in this case, pence on the pound). That means those who pre-ordered an iPhone through the retailer are entitled to a refund, but it will certainly not be the full retail price of £539.99 ($807) of a 16GB iPhone 6, and it will not be as much as those who are bond (debt) holders of the company. The bond holders are “secured creditors,” so they are first in line and will receive between 10 and 20 pence per pound owed.

Customers and some companies (services or trade) are “unsecured creditors.” How much should you expect if you are one of those people? Well, as we stated earlier, perhaps “modest” is not the right word. Customers who paid handsomely for a device they never received can expect a refund of only 0.4 pence per pound (£0.004). That equates to a refund of just £2.16 ($3.23) per 16GB iPhone 6 pre-ordered.

Of course, customers by this point may have sought resolution through their credit card company already, so it is not known how many people will feel the slap of a 0.4% refund.

sources: Mobile Today via Neowin

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13 Comments

1. jngo102

Posts: 50; Member since: Jan 15, 2015

You're losing money when you buy an iPhone in the first place Time for the sh*tstorm.

2. Sauce5 unregistered

Funny, my last 4 iPhones I made a 250%+ profit on after selling them in Brazil. Can't really do that with my other phones =( In the end, all my iPhones have been, "free", I guess you could say.

4. arch_angel

Posts: 1651; Member since: Feb 20, 2015

same here i haven't paid for a phone since my galaxy note lte.

6. Sauce5 unregistered

Nice nice. I plan on selling my Note 4 in Brazil this summer. Will be my first Android phone (hopefully) that gives me a profit.

7. arch_angel

Posts: 1651; Member since: Feb 20, 2015

the note 4 you should profit from it.

8. Sauce5 unregistered

I really hope so. I think I will. I wasted phone space (airports don't like when you bring more than 2-3 high-profile phones over) with the GS4 and the Note 3.

10. Salazzi

Posts: 537; Member since: Feb 17, 2014

Don't Brazilian customs give you a problem with you bringing the phones? I'm assuming you're bringing them in brand new packaging/wrapping?

12. Sauce5 unregistered

I normally bring one on my carry-on, one in my pocket as my "main", and the other one in my suitcase. No one ever gave me an issue. I've known people to get all their phones taken from them though, along with hand bags, shoes, etc. A pair Nike shoes (even ugly ones) go for around 300+ USD.

9. kevin91202

Posts: 642; Member since: Jun 08, 2014

Nonsense. Math is your friend...

13. samsboy unregistered

I guess there are a lot of ifools. They can even buy s**t inside iskin.

3. 99nights

Posts: 1152; Member since: Mar 10, 2015

The resale value on iphones is what it is because the sheeple decide. I wouldnt pay anything more than 300 for an iphone 6 second hand.

5. Salazzi

Posts: 537; Member since: Feb 17, 2014

Good luck even finding it for that. Nobody'd offer it in the first place.

11. theo14461 unregistered

Buying anything from a store that has "4U" in its name, is definitely a mistake.

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