Samsung halts sales, production of troubled Galaxy Note7

Replacement versions can burst into flames too

By CNN, Brandon Walker - Reporter

HONG KONG (CNNMoney) - A Houston-area man is the latest among a growing number of consumers who said Samsung's Galaxy Note7 replacement phone burst into flames.

"Luckily, I had sat it down and it started while it was on a table," Daniel Franks said.

Franks said the phone began to smoke Sunday, while he and his family were at lunch. On Monday, he turned the phone over to a representative from the Consumer Product Safety Commission.

"It got so hot so fast it was melting the plastic on back. The case that was on it was melting the phone, itself."

Franks said he purchased the first Note7 in August and returned it for the replacement Note7 in September.

The announcement is the latest in a string of embarrassing setbacks for Samsung over the Note7, one of its flagship smartphones.

Samsung is putting the brakes on its beleaguered Galaxy Note7 smartphone as fears spread that even replacement versions of the device can burst into flames.

Production of the phone has been temporarily suspended, a person familiar with the matter told CNN on Monday.

The company also announced that it is halting all sales of the Galaxy Note7 smartphone.

Samsung released a statement Monday that read, "We are working with relevant regulatory bodies to investigate the recently reported cases involving the Galaxy Note7. Because consumers’ safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.

"We remain committed to working diligently with appropriate regulatory authorities to take all necessary steps to resolve the situation. Consumers with either an original Galaxy Note7 or replacement Galaxy Note7 device should power down and stop using the device and take advantage of the remedies available."

The statement comes after cellphone carriers in the United States and Australia said they would stop offering replacement Note 7s following concerns that the new versions are no safer from fire risk than the originals.

Soon after the Galaxy Note7 hit stores in August, some users reported that their phones were catching fire. Samsung recalled about 2.5 million devices worldwide last month, blaming faulty batteries for overheating the phones and causing them to ignite.

Replacement phones were supposed to solve the issue, and users started trading in their old devices. But some customers have been reporting the same dangerous problems with their new phones.

In the past week, an American user reported his replacement phone caught fire, even though it wasn't plugged in. And on Wednesday, smoke started billowing from a replacement Galaxy Note7 aboard a Southwest Airlines plane before it departed, prompting the flight's cancellation.

The U.S. Consumer Product Safety Commission has said it is investigating the incident on the plane.

In the meantime, some phone carriers have been taking action themselves.

"Based on recent reports, we're no longer exchanging new Note7s at this time, pending further investigation of these reported incidents," an AT&T representative told CNNMoney on Sunday.

T-Mobile said it would suspend sales of all Note7s, including replacement models. Customers can exchange their Note7s for any device T-Mobile carries.

In Australia, mobile operator Telstra said it had "temporarily paused shipping" of replacement Note7s to its customers "while Samsung investigates reported incidents in the U.S."

The flurry of bad news hit Samsung's stock, which fell as much as 4.6 percent in Seoul on Monday.

The plunge came just days after Samsung shares had climbed to new highs following a call by an activist hedge fund for a revamp of the company's structure.