Cell phone trafficking causing increased loss of millions to cell phone companies
Cell phone trafficking causing increased loss of millions to cell phone companies
Cell phone companies have made it so easy for people to purchase cell phones that it only costs $15 to get one loaded with minutes. But a new problem has arisen for the cell phone companies, hackers and cell phone trafficking. In states like south Florida, New York, California, Georgia, Texas and elsewhere, traffickers have figured out that they can make huge profits by purchasing thousands of low cost “pay as you go” phones and hack into the software so that calls can be made on any cell phone network. After phones have been hacked into, they are sold all over the world and this costs the cell phone companies 10s of thousands of dollars. It is not illegal to unlock the software in your “personal” phone, but cell phone companies base their profits off of people buying their minutes. When numerous people hack into their phones for free minutes the phone companies lose even more money.
TracFone wireless is one of the leading producers of the cheap “pay as you go” phones. The company is suing traffickers across the nations and hoping to put a stop to this “siphoning of profits”. The unlocked phones are sold for between $40 and $60 above the TracFone discount price, and are frequently marketed in lots of 10,000 or more.
In recent months, TracFone has filled 39 lawsuits. Lawsuits similar to TracFone’s have been filled by AT&T, Nokia corp., Virgin Mobile USA Inc., and Motorola Inc.
TracFone and other companies have argued that, under federal law, the phones must be used with the minutes that were bought from the company that sold the phone. Companies like TracFone, lose profit when people buy minutes from other companies.Some cell phone companies disagree that cell phone hacking is wrong. A company called Incomtel, which is the self-proclaimed “Cellular supplier of the world” was among those companies that were recently sued by TracFone. In court, Incomtel lawyers argued, “that it is perfectly legal to buy phones from stored such as Wal-Mart, CVS and Target and modify them to work with any cell phone system.” Incomtel also said, “because the phones made by Motorola and Nokia are purchased on the open market and are repackaged for resale, Incomtel is under no obligation to incomtel.” So far, TracFone and similar companies have been winning more cases than losing
3 comments:
There are no laws stating that you cannot modify electronic devices; however when you tap into the network there lays the problem. A close related example is when people steal cable. Modifying your cable box is not illegal, however when you start to watch the channels without paying it becomes illegal.
This is a problem and like Neil said about TV channels the same thing is going on with downloading music! I think it is wrong because in a way I see it as people stealing. I know someone that knew how to change the network on their phone, I thought I was so strange how people learn how to do these things! If they want these things to stop, Cellphones services, Cable, and music, then they need to make a law on this to make there action illegal and do it in a way that people will start getting fined for doing so. Or else people are just going to keep taking!
The emergence of these “improved” cell phones does not really surprise me in today’s society. As we have seen when consumer surplus is low the appearance of black markets can appear, and this is the same thing. People are choosing to pay a cell phone, but are willing to steal the minutes. Cell phones are almost a necessity today, and although I feel it is wrong I can see why people feel this may be the only choice they have to save some money in today’s weak economy.
Post a Comment