News
Past Media Coverage
Dallas Morning News
AT&T, others fight prepaid-phone ‘traffickers’ they say cost millions
8/4/09
In 2006, three Dallas-area men who bought more than 1,000 prepaid cellphones were arrested on suspicion of terrorist connections.
As it turned out, they were just buying the phones to resell elsewhere for a profit. The terrorism charges were dropped, and it seemed that a crisis had been averted. But for many wireless companies, prepaid-phone resellers are the crisis, and the industry is dialing up efforts to shut them down.
Wireless companies often sell prepaid phones below cost, expecting to make money by selling minutes. But resellers can easily reprogram the phones to work on other companies’ networks, often in other countries. When users buy their minutes from those firms, the original company misses its chance for a profit.The wireless industry says the practice costs it tens of millions of dollars per year.
The Associated Press
Cell Phone Companies Scramble To Halt Trafficking
7/13/08
For less than $15, you can buy a cell phone loaded with minutes. You can buy more as you go whenever those minutes run out. Best of all, you aren’t locked into a long-term contract. But 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.
E-Commerce Times
The Prepaid Phone Trafficking Web of Crime
07/21/08
Wireless industry firms are stepping up their efforts to combat cell phone trafficking. For one, TracFone began aggressively investigating people involved in the activity a few years ago, and it has filed more than 40 cases against nearly 150 defendants, notes James B. Baldinger, an attorney who represents the company.
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Reuters
TracFone Applauds First Criminal Conviction of International Prepaid Mobile Phone
5/19/08
TracFone Wireless Inc., the largest U.S. provider of prepaid mobile phone services, says today’s guilty plea by an international trafficker of prepaid mobile phones is an important milestone in the industry’s battle against the bulk prepaid phone purchasing scheme throughout the U.S., an activity that includes altering the phones’ proprietary software, repackaging the devices and then reselling them domestically and abroad to unsuspecting customers.
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Prepaid Reviews
T-Mobile gets final judgments, injunctions against prepaid traffickers
8/7/08
Just a few months after Tracfone won a suit against a prepaid phone trafficker, T-Mobile has obtained final judgments and injunctions against two companies and an individual. T-Mobile will also receive $6.5 million in damages from the entities, which include Fone Xchange and ASPAC Inc.
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To see additional news coverage on this topic, visit:
www.carltonfields.com/newseventspubs/publications/detail.aspx?publication=453
