"Refurbished iPhones Sold at 60% Discount"...Identity Exposed by Suspicious AS Responses

1400 Counterfeit Smartphones Sold Deceptively in China
Masan Customs of Korea Customs Service Refers Seller to Prosecution
Genuine Logos, Manuals, and OS Installation Included
5 Billion KRW Customs Evasion Amount to Be Recovered

An online seller who distributed counterfeit smartphones made in China as refurbished products of overseas famous brands (products repaired and resold such as exhibition or returned items) in South Korea has been caught and sent to the prosecution.

On the 17th, Masan Customs Office of the Korea Customs Service announced that a man in his 30s, Mr. A, was sent to the Changwon District Prosecutors' Office Masan Branch last month without detention on charges of violating the Trademark Act, for distributing counterfeit smartphones of overseas famous brands as refurbished products in South Korea. Mr. A is accused of earning unfair profits worth about 300 million KRW by selling over 1,400 counterfeit smartphones made in China on 12 major domestic open markets from June 2022 to October last year, pretending they were genuine refurbished products. He sold the counterfeit smartphones in a proxy purchase form, at prices ranging from 220,000 to 700,000 KRW, about 60% cheaper than the genuine prices of 550,000 to 1,580,000 KRW.

Counterfeit Chinese smartphones seized from Mr. A by Masan Customs
[Image source: Provided by Korea Customs Service Masan Customs, Yonhap News]
Photo by Yonhap News

These counterfeit smartphones were so meticulously forged that they had the same logos and product manuals as the genuine products, and were even installed with the proprietary OS (operating system) that genuine products have. Because of this, buyers were deceived into purchasing the counterfeit products, believing them to be refurbished phones without suspicion.

Mr. A’s scheme was uncovered due to a response on the open market product inquiry board. Masan Customs became suspicious after seeing the seller’s reply on the inquiry board of the open market selling these counterfeit products, stating, "For A/S, please proceed through private companies," and started an investigation in May last year. During the investigation, Masan Customs also confirmed many buyer posts stating that "A/S was not available from the official repair center because the screen and other parts were not verified as genuine."

Additionally, Masan Customs plans to confiscate the full amount of evaded customs duties and penalties, estimated at 500 million KRW, as Mr. A imported about 9,300 items (worth approximately 4.6 billion KRW), including counterfeit smartphones and genuine famous brand Bluetooth speakers. A Masan Customs official advised, "When counterfeit goods are detected by customs, they are all destroyed regardless of the amount, and the damage is directly borne by consumers. If official after-sales service is impossible or the price is too low compared to genuine products, you should suspect counterfeit goods and avoid purchasing them." The official also urged, "If you discover illegal activities such as counterfeit product sales or underreporting prices, please report them to the Customs Service Smuggling Report Center."