False Water Damage Indicator?

Was trying to get apple care on my Iphone 4. Only 20 days old from Verizon. Took it to apple and they said the indecator shows water damage. It has not been near water and have no ideal how this could happen.

There's no signs of water on damage anywere or signs of any thing else, this phone is in perfect condition, works like the first day out of the box.

Is there any thing I can do?

This has happened to me as well. We lost power during the Hurricane Sandy and was charging my phone in the Car since we didn't have power. The house was cold during the night and perhaps charging the phone in the warm car could have caused the water damaged. I don't know. My phone was never near any water. I took it to the Apple store as well and spoke to a Mgr. He said that because there was water damaged that the warranty on the phone was voided and that he could offer me an oow device for $150 bucks. I explained over and over that I did not drop the phone in any water or had it near water. But he continously pointed out the indicator had turn red. The warranty just expired on 11/2. My phone died on 10/29.smh. I'm still without a phone I'm glad to know that I'm not crazy and that this has happened to other people as well. I have a iPhone 4. Perhaps this is a defect with this phone. My husband has the 4S and he did the same exact thing to his phone and nothing happened to it. Apple needs to be more understanding regarding this issue since it seems that it happening to many of their customers.