The Prepaid Press - March 15, 2008 - (Page 12)

PREPAID WIRELESS March 15 · 2008 - 12 AT&T Strikes Back from page 1 civil conspiracy and unjust enrichment. AT&T also notes that TracFone, T-Mobile, Nokia and Virgin have all filed similar suits in federal courts across the country. Scheme Details The practice is relatively unsophisticated, and uses labor intensive brute force methods. The companies enlist “runners” by advertising on the Internet. These runners then go to stores like Best Buy, Sam’s, Target, Wal-Mart and other retail locations. They buy the prepaid handsets, which are intended to be used to access AT&T’s GoPhone service. To make sure that they can only be used in conjunction with the service intended, the handsets are “locked” to that service. After buying the handsets at a retail location, they are then taken to a central location where they are removed from the retail packaging, and logos and other distinguishing marks removed. Finally, they are unlocked so they can be used on other networks and shipped overseas, where they are marked up and sold at often large profit margins. The international market for repackaged handsets is very large, and their ubiquitous availability in retail locations makes them tempting targets. Locking the handset means that the handset will only work when a SIM card that is connected with the carrier’s service is inserted. This stops someone from buying a handset, then inserting another carrier’s card in it. However, carriers will usually unlock the handsets on request. To make the handset work with a carrier overseas, where they are usually shipped and sold, the handset must be unlocked. The process can be as simple as entering a series of codes, or as complex as requiring a PC to finish the procedure. The suit alleges that the defendants unlocked the handsets in violation of the license agreement that is attached to the retail packaging. Traffickers Bypass Policies AT&T told the court that it had implemented policies at the retail level in an attempt to thwart the traffickers. The number of GoPhones an individual could purchase was limited by policy, but AT&T said the defendants circumvented this by employing large numbers of runners to make multiple purchases. The practice is relatively unsophisticated, and uses labor intensive brute force methods. As a consequence, according to the suit, AT&T Mobility is losing millions of dollars, and is asking the court to award it damages of $76 million. AT&T is represented by James Baldinger of Palm Beach-based Carlton Fields, who also represented TracFone in other cases in recent months against wireless phone hackers, and is working with federal law enforcement officials on the problem. Carlton Fields said that it was also pursuing the matter with law enforcement officials. http://www.wcgltd.com info@wcgltd.com http://www.wcgltd.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - March 2008

The Prepaid Press - March 2008 tppEXPO’08 Slated for August 19-21 AT&T Strikes Back Contents The Retske Report: Net Neutrality 5 Minutes With Terry Maher, NBPCA Counsel Regulatory Rundown: FCC Enforcements Prepaid Wireless Roundup Prepaid Wireless in Brief tppEXPO’08 Spotlight BlackBerry Prepaid Option to be Offered Virgin Mobile USA Ringbacks Growing The Splitting of a Titan The State of Prepaid Technology: Part II – The Other Prepaid Calling Spot Rates Calling Cards in Brief IVR and Stratus to Offer SIP Platform PhoenixSoft Completes Integrated IP Transcoding The Legal Line Web Streamlines Bill Pay & Prepaid Distribution Travelex Debuts New Foreign Currency Packs TSYS and Telrock to Provide Mobile Solutions Payments in Brief NBPCA Offers Tips to Fight Money Laundering Hypercom Responds to Ingenico Inquiry Kiosks Change the Face of Prepaid Prepaid 101: Prepaid Wireless Coinstar to Expand Centers in Wal-Mart Locations Meta and MoneyGram Partner NRF Battles Retail Crime Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - March 2008

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