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Samsung struggles to restore reputation amid false reports of Galaxy Note 7 fires

A string of false consumer allegations that their Galaxy Note 7 devices caught fire is dampening Samsung Electronics’ efforts to restore its reputation and consumer trust hurt by faulty batteries prone to potential explosions.

Since announcing a worldwide recall of its new large-size smartphone earlier this month, the South Korean tech giant has received a total of 26 false reports of Galaxy Note 7 fires, the company said Wednesday.

Samsung’s Galaxy Note 7 (Yonhap)
Samsung’s Galaxy Note 7 (Yonhap)

For 12 of the 26 reported cases, Samsung stated that authorities did not discover any defects with the devices. In seven cases, the consumers who made the reports could not be reached and in another seven cases, the consumers cancelled their reports or claimed they had thrown away their devices, the firm said.

In the US, where some 1 million devices were recalled, nine such cases were reported. Another three came from Korea, where some 400,000 units were recalled, and another two from France.

One such case was made each in the UK, Canada, Singapore, the Philippines, Vietnam, Turkey, Croatia, Romania, Iraq, Lebanon, the United Arab Emirates and the Czech Republic, according to the tech firm.

“Of the consumer reports claiming that the Galaxy Note 7 caught fire, cases in which the given consumer could not be reached or whose identity could not be confirmed were deemed as false reports,” Samsung Electronics said in a statement.

“Among the false reports, some involved experiences that they had heard of from friends while others involved deliberate damages made to the device or mistaking the device’s normal heating process as a defect,” it said.

In Korea, a person claiming to be a convenience store worker uploaded a picture online asserting that the Galaxy Note 7 caught fire while charging. Yet this person remains unreachable, Samsung said.

In Canada, a user misappropriated an image of a Note 7 catching fire that had been circulating online, while another user in Singapore claimed to have thrown away the handset while driving because the device had caught fire, yet did not provide any evidence.

In China, which was not part of the global recall as the devices sold there used non-defective batteries sourced from another vendor, the China-based ATL, one user alleged that his Note 7 exploded due to faulty batteries. After conducting related tests, Samsung’s Chinese unit stated that the explosion was found to have been caused by “external heating” rather than faulty batteries.

The Korean electronics giant began its large-scale recall program last week, starting with Singapore where the exchange process started last Friday. The replacement process began in Korea on Monday and in the US on Wednesday.

The current recall has dealt a costly blow to Samsung, which had been betting on the Galaxy Note 7 to bolster its sales against competitors such as Apple and its recently released iPhone 7 and iPhone Plus.

Given Samsung Electronics’ tarnished brand image and the financial costs of the recall, analysts remain uncertain over whether the company’s operating profit this year can surpass the 30 trillion won ($26.7 billion) mark as hoped.

In light of the Note 7 debacle, many local analysts lowered their forecasts for Samsung Electronics’ third-quarter operating profit by about 1 trillion won last week.

By Sohn Ji-young (jys@heraldcorp.com)
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