Complaints about auctions rise, as locked iPhones and iPads anger consumers

Sydney retiree Suzanne McCarthy was excited to start using her first iPad 3, which she had nabbed at Sydney Airport's lost property auction for $330.

But the excitement turned to anger when she realised the device was activation (or iCloud) locked, and essentially a "brick". No one could help her and she had no rights to a remedy under the Australian Consumer Law.

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"Apple told me they couldn't unlock it. They were shocked, saying it should never have been sold like that and I should take it back to Pickles Auctions straight away," said Ms McCarthy, 69, from Belfield.

"I felt Pickles shouldn't have sold it in that condition. I feel angry a massive number can be sold like that, when the auctioneers would have known they were useless objects if locked."

iPhone and iPads that are activation locked are being flogged on websites such as eBay and Gumtree. They are essentially ...
iPhone and iPads that are activation locked are being flogged on websites such as eBay and Gumtree. They are essentially "bricks". Photo: Bloomberg

The locked  iPad was among the digital devices - nine new iPhones in original packaging, 150 phones, 1000 iPads and tablets and 150 laptops - up for grabs at Sydney Airport's lost property auction in November, run by Pickles in Milperra. 

Many digital devices are now activation locked as an anti-theft measure. While theft rates have reduced, locked devices are still being flogged online. A phone can also be carrier locked, which means it can only be used on the network it was sold for.


Pickles warned during the auction that all items were lost property and may be damaged, faulty, have missing parts, be locked, blocked and "sold as is where is".

NSW Fair Trading confirmed that in general the consumer guarantees under consumer law do not apply to goods purchased at auction. That is, consumers with products that are "not fit for purpose" cannot pursue refunds, replacements or repair.

Suzanne McCarthy is angry over the locked iPad she obtained via the Sydney Airport lost property auction.
Suzanne McCarthy is angry over the locked iPad she obtained via the Sydney Airport lost property auction. Photo: Supplied

It received 367 complaints regarding auctions in 2015, up 36 per cent on the previous year's figure. Most complaints related to "unsatisfactory goods" and "defective goods".

"While there is no requirement under the ACL for auctioneers to ensure goods are in working condition, under the law, auctioneers must not make misleading of deceptive representations about goods to be auctioned," a spokeswoman said.

Suzanne McCarthy with her locked ipad purchased at Sydney Airport Auction
Suzanne McCarthy with her locked ipad purchased at Sydney Airport Auction Photo: Supplied

"Before purchasing digital items through auction, consumers should satisfy themselves that the item is in suitable working order. Where possible, inspect the item or contact the auctioneer prior to bidding to confirm the condition and ask specifically whether it is locked."

Ms McCarthy said no authorised Apple repairer she contacted could unlock her iPad. One person said it could be sent overseas and unlocked for $250. She refused.

She said it was irresponsible for Pickles to sell digital devices that were most likely all locked, since they were lost property.

But Pickles auction manager Matthew Blunden said about 300-400 potential bidders attended a viewing day before the auction where they charged and tested digital devices.

"It's lost property. We're very aware some of this stuff may be essentially for parts only," he said.

"We had some people ringing in complaining, saying 'I paid $200, $300'. But the public sets the price. If it sells for $5, it sells at that."

They have refused Ms McCarthy a refund.

A search on auction host eBay and its subsidiary Gumtree, a classified advertising service, found numerous listings for Apple devices priced between $150 to $700 that say they are iCloud locked but do not state they are for parts only.

A Surry Hills-based seller on Gumtree is spruiking a iPhone 5C with the description: "Phone is [in] working condition and functions perfectly... requires iCloud lock to be removed".

Associate Professor David Glance, director of Centre for Software Practice at the University of Western Australia, said auction houses should be aware of the activation lock and should not be selling ones that are affected.

"It does potentially come down to them. But on Gumtree, you're pretty much left to your own devices. A listing should clearly state it's unlocked," he said.

"The industry calls them 'bricked'. There are legitimate cases where people die and don't leave their details and their family can't get access, making the device useless."

eBay's guide to locks on iPhone says it is an "easy problem to overcome when the previous owner is with you, as he or she can simply enter the necessary information to remove the device from his or her account".

The Sydney Airport lost property auction raised a record $234,000 for charities, including Steve Waugh Foundation, Dymocks Children's Charities, Stewart House and St Vincent de Paul Society.

A new gold iPhone 6 Plus sold for $1200.

Auction Tips

  • Don't participate unless you read and understood the rules. There are many types of auctions, be clear on what the rules are before you bid.
  • Before registering at an auction, or joining an online auction site, read the terms and conditions and know all the fees and charges. These can include registration or administration fees or being charged to bid even if yours might not be the winning bid.
  • For online auctions, check if the site has buyer protection policies, complaint handling procedures and a dispute resolution process.
  • Check online seller reputation using the feedback ratings on the site.
  • Do not enter into an arrangement with an online seller to buy privately outside the auction site. Doing so could expose you to a scam. Also you may not benefit from buyer protection policies that might be provided by the site.

(credit: NSW Fair Trading)