1.) How is unlocking a phone "malware"? Isn't the lock malware, and the unlocking serves the owner of the device? Calling it malware reeks of regurgitating AT&T propaganda.
2.) How did this "deprive AT&T of the stream of payments it was owned under the customers’ service contracts and installment plans."? A phone getting unlocked doesn't void a contract, so those customers are still on the hook.
> Fahd allegedly recruited AT&T “insiders” to install malware programs that gathered confidential information and submitted unlock requests using employee credentials via a remote server.
These were probably 3rd party call centers or section of the company that ran their customer service lines which gave agents the ability to unlock devices.
The amount of spin this article is using to associate locking devices to keeping customers in long-term contracts is quite strong though.
I cannot see how would his be profitable. Usually when a customer receives a new cellphone at a lower price, that comes with a 12-24 month extension of a proportionally expensive contract. After said contract expires, AT&T has already made its profit. Even if someone would want to take the device and use another company's SIM card, they would still have to honour the contract with AT&T.
The only "free money" scenario I can think of, is stealing AT&T devices, and reselling them in the black market/ebay/etc and thus pocketing all the $$$ without having the customers signing contracts.
Ps: this is why a large company needs a large Internal Audit department.
Edit: removed an off-topic NSA-AT&T comment, added the Ps
A large number end up in collections or written off. AT&T doesn't want to issue unlock codes in those cases, because it severely reduces the chances of them getting paid.
AT&T also asks for your ID, so since they're using a stolen credit card I presume they're also committing identity fraud. Is this really wide spread issue though? Since they must be on the CCTV how many times can a scammer use the same human agent?
I used to work at a att store. You would be very surprised how often people open consumer or business accounts with new 4 new iPhones and just never make a payment on it. Just find someone willing to destroy their credit for 1000$ cash and sell the phones for 2000$
1. It's malware from the perspective of the entity whose computers it was installed on. To respond to your meta-point, phone locks are merely a technical control to help ensure consumers abide by their contractual obligations. At least, this is the case since companies have been obligated to offer unlocks for phones whose contracts are paid off.
2. Presumably, it's a combination of a number of mechanisms, like judgment-proof consumers or identity thieves unlocking and reselling devices.
Are they really obligated to offer unlocks now? I stopped getting subsidized phones 5 or so years ago (and it seems carriers mostly don't offer them anymore anyway), but I fought tooth and nail with multiple carriers to get my paid-for device unlocked, and usually the answer was "piss off".
Recently my parents switched carriers for whatever reason, so I had to get a new phone. Honestly I would have kept my Note4 for another year, but whatever. Being a phone from, what 2014? it was well paid off at this point.
1. I went to the AT&T Store, asked them to unlock my phone. Was told, no sorry, we don't do that here. "Call the support line."
2. Called the support line, waited 20 minutes, was transferred to the correct department, waited another 20 minutes. Was told, we don't do that over the phone anymore. Go to this website here.
3. Went to the website. It asks for the number that is printed behind the battery (y'know back in my day, you could remove batteries from the devices you owned and replace them) Next, it asks for some device ID Number that you need to ask the phone for. So you turn it back on, follow the directions, etc. Then you submit the form. Then they tell you it can take up to 48 hours to get the unlock code.
4. Wait.
5. Receive absolutely no confirmation or acknowledgement that your request was received or actioned on at all.
6. Buy a new phone because it isn't worth the hassle.
It sounds like he had to install malware in the call center / AT&T remote location so he could get the unlock codes remotely. "Malware" is probably not the correct term.
Once the phone is ported to another network, the original provider is basically SOL, contract or no.
>Fahd allegedly recruited AT&T “insiders” to install malware programs that gathered confidential information and submitted unlock requests using employee credentials via a remote server.
Sounds like the malware was stealing creds to be used to unlock the phones.
Many of these devices are unlocked in bulk and sold overseas. This deprives them of the payments that they expected for fronting the cost of the device.
I still don't understand how. Regardless of who ends up using the phone, surely the original purchaser/signer is still on the hook for the monthly payments?
ie. If I buy a contract iPhone from AT&T then unlock and sell on the phone, that doesn't nullify the fact that I still owe AT&T $100 a month for 24 months, regardless of where the phone is?
Yes the original purchaser is still on the hook for the payments. However in America today there are absolutely tons of people who are on the hook for payments that they simply do not make. In the tech world people are generally financially well off that they don't realize this. There are people that will just shrug at the fact they owe money to a company.
At least if the phone is locked the carrier can just cut off service as an attempt to hopefully get payment as the phone is rendered useless without payment. However with unlocked phones theres no way for them to get the money they are owed. It's insanely expensive for them to go after each and every subcriber legally that doesnt pay.
Remember, they are loaning these devices to subscribers who cannot pay the entire cost upfront with the hope they will pay them back over the course of the contract. Unlocking the phone gets rid of the one collateral they have. Thats the reason your account must be in good standing to unlock early with every major carrier and why some do credit checks.
If you buy an AT&T locked phone from a third party retailer, (ex Best Buy), you're expected to sign up for AT&T, but not under contract to do so; these phones are usually marketed for prepaid plans.
AT&T will usually unlock them if you request it prior to using it on their network, but would likely not unlock them in bulk for exporters.
I've purchased and used some of these when the price and timing was right and the frequencies aligned with my chosen network. It's more hassle than an unlocked phone, but sometimes the phone isn't available unlocked or locked to my chosen carrier. (More often, these phones are missing key frequencies, so not very useful on other networks)
It's "collateral" for the contract. Locking the phone is their way of putting a "lien" on it. Taking people to court over relatively small unsecured debts will eat through a good chunk of the margin that telecom companies are making off of those contracts in the first place. A locked phone is a couple hundred dollars worth of extra leverage to get a debtor to not default on the contract.
Selling the phone doesn't magically terminate the contract - they are still on the hook for all outstanding payments whether the phone is there or not.
If fraudsters are doing this in bulk (and using false/stolen identities to sign up for the contracts in the first place) then the main problem here is inadequate identity checks & fraud protections during the initial purchase and not phone unlocking.
The article makes it sound like this particular guy was just charging consumers to unlock their personal phones so they could use them on different networks.
I’ve been involved in these kinds of events in the past. The carriers go after anyone facilitating device unlocks extremely aggressively because there is a huge supply chain problem.
Consequently, just because the article says things, I’m pretty wary of trusting them to be correct.
I'm not sure what you're saying here. It sounds like you agree with the article that carriers go hard after anyone who helps unlock phones, but disagree on...what?
2.) How did this "deprive AT&T of the stream of payments it was owned under the customers’ service contracts and installment plans."? A phone getting unlocked doesn't void a contract, so those customers are still on the hook.