T AT&T Inc

By Trisha Thadani and Georgia Wells 

AT&T Inc. and T-Mobile US Inc. said Sunday they will stop issuing new Galaxy Note 7 smartphones to replace the ones turned in by customers, further complicating a massive recall of the Samsung Electronics Co. devices and sowing confusion among consumers after multiple reports of the devices overheating.

AT&T, one of the biggest distributors of Samsung phones, said Galaxy Note 7 customers can return their phones for different models while Samsung and U.S. safety authorities investigate why several phones melted in the past week.

T-Mobile US Inc. said it is suspending all sales of the Note 7 and halting exchanges for replacement Note 7s. Customers can still bring in their Note 7 phones for a refund or different device.

At least four Samsung phones smoked or caught fire during the week, including one on a Southwest Airlines Co. flight before takeoff . It wasn't clear if those affected were Note 7 devices, or if the problems were because of faulty lithium-ion batteries.

"We're no longer exchanging new Note 7s at this time, pending further investigation of these reported incidents," AT&T said in a statement.

Samsung is working with authorities including the U.S. Consumer Product Safety Commission to investigate the new incidents, a Samsung spokeswoman said Sunday.

"We are working diligently with authorities and third-party experts and will share findings when we have completed the investigation," the company said in a statement. "If we determine a product-safety issue exists, Samsung will take immediate steps approved by the CPSC to resolve the situation."

Regarding the suspensions, Samsung added, "We respect their decision."

The CPSC doesn't know if the most recent incidents involved replacement Note 7 phones, a spokesman for the agency said Sunday. "We would like to speak with each customer and assess what happened to their phone," said CPSC spokesman Scott Wolfson. "It is important for consumers to be reminded that a full refund is one of the options available under the recall."

Samsung launched a recall of the 1 million Note 7 phones in the U.S. last month after discovering that the lithium-ion batteries could explode while charging. Under the recall, hampered by misinformation and false starts at the beginning, consumers could exchange their Note 7s for a new device or obtain a refund.

The recall seemed to be finally proceeding smoothly until the Southwest Airlines incident last week. Customers have since reported other phones catching fire or melting even when not plugged in.

On Friday, a Galaxy Note 7 overheated and started smoking in the hand of 13-year-old Abby Zuis, according to her father, Andrew Zuis, of Farmington, Minn. The device was a replacement phone that he had from a Verizon Communications Inc. store at the beginning of the recall, he said.

Another Samsung customer, Shawn Minter, of Richmond, Va., said he was awakened Sunday morning by his replacement Note 7 phone making a loud noise and emitting smoke and flames. "I've never seen anything like that in my life," he said.

"We are taking every report seriously," Samsung said in a statement.

The decision by the carriers to stop offering replacement Note 7s comes after U.S. phone carriers Friday said they would allow customers to replace their phones a second time.

After offering to distribute new replacement phones on Friday, Verizon on Sunday said the company is completely out of stock of Note 7 devices. Customers can place an order for a new Note 7, or exchange it for another device, a spokeswoman said.

Samsung's devices aren't the only electronics to catch fire. Lithium-ion batteries, which power many of today's mobile devices in addition to Samsung's, have been known to catch fire. The Federal Aviation Administration has previously said they have recorded 171 incidents involving batteries aboard aircrafts from 1991 to January of this year.

Write to Georgia Wells at Georgia.Wells@wsj.com

(END) Dow Jones Newswires

October 09, 2016 21:54 ET (01:54 GMT)

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