Cell Phone Companies Scramble To Halt Trafficking
Date : 15 Jul 2008 Category : Technology
NewsFactor NetworkBut in South Florida, New York, California, Georgia, Texas and elsewhere, traffickers have figured out they can make big profits by purchasing thousands of these low-cost phones and tweaking the software so that calls can be made on any cell network. The altered phones are then sold all over the world -- costing the phone companies tens of millions of dollars.
Some traffickers employ dozens of people full-time as "runners" to buy the phones at retail stores so they can later be hacked into and resold. The problem for the phone companies is that they often sell the phones at a loss, instead making their money when customers have to buy additional minutes from them -- a guaranteed profit once the phone is sold. But the phone companies have no guarantee that customers will buy minutes from them after the phones are hacked or shipped to a far-off country.
It's technically not illegal to unlock the software on your personal cell phone -- but the companies are hoping to put a stop to traffickers that they say are siphoning away profits. Led by Miami-based TracFone Wireless Inc., makers of the low-cost prepaid cell phones are suing traffickers in federal courts around the country. One such lawsuit resulted in a criminal conviction in Houston when a man disobeyed a court order by refusing to stop selling the phones.
"There is a lot of profit in it," said James Baldinger, a West Palm Beach attorney with the Carlton Fields firm who represents TracFone. "Even as we continue to shut people down, we do find there are people still engaged in it....