Yes they were lying to you. I had a 2008 528i and it did the same thing so I called BWM North America. They told me that it was because my iPhone is newer than the car so the bluetooth wouldn't work with the version of the iPhone. I recently traded the 528i in for a 2006 650i and now it works fine with the iPhone 5. I called back to let them know that now I have a older model BMW but not experiencing the same problems. They didn't say much but when I was told the iPhone wasn't compatible, I knew they were lying and tried to explain to the lady at BMW North America that bluetooth is standard, it doesn't change, that's why you can just buy any bluetooth earpiece etc.