Samsung Electronics Co. and the U.S. Consumer ProductSafety Commission agreed on an expanded recall of original andreplacement Note 7 smartphones, increasing the number of devicesthat can be returned to 1.9 million.

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All owners of the Note 7s will be able to exchange their devicesfor another Samsung smartphone or receive a refund under the planapproved by the CPSC, the company and agency said in statementsThursday.

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Customers who exchange the Note 7 for a Samsung device will geta $100 credit, while those opting for an alternative brand willreceive $25 credit.

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Samsung cut its third-quarter operating profit by $2.3 billionon Wednesday after deciding to permanently end production of thetroubled smartphone. The Note 7 devices were overheating andcatching fire even after a recall that was supposed to fix theproblem.

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“We are committed to doing everything we can to make thisright,” said Tim Baxter, president and chief operating officer ofSamsung Electronics America.

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Doubles number of phones subject to recall


The announcement almost doubles the number of smartphones subjectto the recall. The U.S. consumer agency had announced a voluntaryrecall of almost 1 million Note 7s on Sept. 15.

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The commission mainly enters into agreements with companies forrecalls rather than going to court to compel action.

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“The lithium-ion battery in the Galaxy Note 7 smartphones canoverheat and catch fire, posing serious fire and burn hazard toconsumers,” the agency said in a release.

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Samsung has reported 23 new cases of incidents in the U.S. sincethe Sept. 15 recall announcement, according to the agency. Out of96 total incidents, there have been 13 reports of people injured byburns and 47 cases of property damage.

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Battery flaw


The latest incidents appear to be due to a battery flaw differentfrom the one that triggered the original recall last month, aperson familiar with discussions about the issue toldBloomberg.

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“The recall expansion announcement made just now won’t make anydifference on the cost that Samsung has reflected on its latestrevised earnings estimates,” said Song Myung-sup, a Seoul-basedanalyst at HI Investment & Securities Co. “However, winningback the customers’ trust is a different issue. That side effectwill linger until early next year.”

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After three straight days of declines, Samsung shares reboundedtoday, rising 1.4 percent in Seoul trading. The stock has slumped10 percent in the previous three trading days, wiping $21 billionfrom its market value.

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Related: Samsung Note 7 users urged to turn them off due tofire risk

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Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

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