TracFone Gets Word Out on Traffickers

Tue, 11/25/2008 - 7:38am
Monica Alleven

TracFone Wireless is still struggling with cell phone traffickers who are selling prepaid phones overseas, and now it’s starting a new ad campaign aimed at putting them out of business.

The ads are appearing in newspapers and magazines across the Untied States and online, warning “runners” of mobile phones and resellers that the company is committed to taking legal action against anyone involved in such unauthorized purchasing, hacking or resale of TracFone or NET10 prepaid phones.

TracFone has been working with retailers, many of which have agreed to sell no more than two TracFones to one customer a day. But some people are going around that, hiring “runners” to buy two phones at a time from as many stores as possible, explained TracFone attorney Jim Baldinger of the firm Carlton Fields. Then someone unlocks the phones, either in the United States or elsewhere, takes out the SIM cards and resells the phones for a higher price in another country.

TracFone sells its phones in places like Target and Walmart for as little as $9.99, with the plan being that it will recoup the subsidy as the customer uses the service. “In a sense, they’re stealing the subsidy,” he said. The phones end up in places like Hong Kong, India and Latin America.

TracFone has about 33 or so injunctions that have been entered into courts around the country. So far, it has won more than $42 million in damage awards.

In October, international cell phone trafficker Muhammed Mubashir, 28, of Sugar Land, Texas, was sentenced to nearly five years in federal prison for charges of criminally disobeying a federal court order prohibiting him from continuing to purchase, tamper with or export prepaid mobile phones. Virgin Mobile had filed a complaint against him in 2006.

Baldinger said the hope is those kinds of sentences will send a message to people who are dealing in cell phone trafficking, some of whom might not understand the significance of their actions.


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