Thursday, September 5, 2013

The Great Phone Scam

Here’s the story. Yesterday afternoon, we arrested six people after they fraudulently purchased iPhones from the Apple Store at the Town Center Mall.  The first case involved a group of five people from New York who were working together. They purchased 28 phones with cash and were charged with organized scheme to defraud, grand theft, possession of marijuana and paraphernalia.

While we were booking the first set of suspects a second call came in. In this case, a female purchased four iPhones with cash.  She was arrested and charged with loitering and prowling.  These incidents are just two examples of several cases we’ve seen over the last few weeks.

Here's how the scheme works.  The victim’s personal information is somehow compromised, often through their cell phone carrier.  The suspect calls the carrier and has additional lines added to the account.  The suspect then goes to the store, in these cases it has been the Apple Store, and purchases the maximum number of phones allowed on the account. They pay with cash, typically at a discount. 

The challenge begins when police try to identify the victims, since the account holder is not actually charged by the carrier when the fraud is exposed.  The store selling the phones received cash payment for the merchandise, so they are often indifferent.  The account holder whose personal information was compromised is technically a victim of identity theft. However, they are not likely to get involved because they rarely live locally.  The carrier, a very large corporation, is often uninterested. All of these issues make prosecution difficult.

So what’s the solution? The phone manufacturers need to develop and deploy the “kill switch,” software enabling the fraudulently obtained phone to be remotely deactivated.  Hopefully, we will see this happen soon.

The individual cell phone account holders can protect themselves by contacting their provider and having their account flagged to allow no additional lines, unless the request is made in person and identification is provided.

Criminals are always looking for a new angle. Please take the necessary steps to protect yourself and your identity. Let’s be careful out there.


Brian Brinley said...

Call me crazy but instead of a remote kill switch, which can be compromised. Wouldn't it make more sense to govern the transactions of the phone holders accounts? Since when are we allowed to openly walk into take ownership without proper identification?

The phones are just another medium, same applies for credit cards, utility bills, etc..

Chief Alexander said...

Brian- That seems perfectly reasonable. The carriers and retailers would have to be on board. The kill switch would be more applicable to stolen phones, when someone walks in with a device and opens an account.