Traffickers Hack Prepaid Phones

It’s not mobile media-related, but Reuters has an interesting report on those inexpensive, pre-paid phones—the ones you can buy for about $15, use the built-in minutes, and then buy more minutes whenever you need them. In South Florida, New York, California, Georgia, and Texas, “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 report said. “The altered phones are then sold all over the world—costing the phone companies tens of millions of dollars.”

This is worse than it seems, because America is a unique case where people pay little to nothing for cell phones up front, so that the carriers can stick it to charge consumers over a two-year period. When thieves steal the low-cost phones and hack them to work forever, the carrier really loses in both directions, since they subsidized the cost of the phone in the first place.

“There is a lot of profit in it,” said James Baldinger, a West Palm Beach attorney with the Carlton Fields firm who represents TracFone, in the report. “Even as we continue to shut people down, we do find there are people still engaged in it.” Check out the full report for more details.

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