This article is more than 1 year old
T-Mobile and AT&T stung in $22m handset scam
Eight indicted in elaborate dealer fraud
Eight people have been indicted by a Brooklyn court for running a scam that involved dealers using customer details to order handsets, in a fraud worth $22m.
The charges allege that two of the defendants, who ran cellular dealerships in New York and Florida, picked up customer details from the network's databases, then used the details to impersonate those customers and order additional handsets, as well as making insurance claims for broken handsets. Deliveries were then either redirected en route, or simply sent to the defendants' addresses.
Got Wireless operated out of Brooklyn and was authorised with AT&T as well as T-Mobile, while KP Wireless was based in West Palm Beach, Florida, and only had access to T-Mobile's customer database. But the owners of both companies are accused of lifting customer details and then posing as those customers to buy additional handsets or make insurance claims for replacements.
The group apparently then bribed delivery drivers subcontracted by FedEx and DHL to intercept the packages, while other confederates scanned the boxes as having been successfully delivered.
UPS deliveries obviously presented more of a problem as they were sent directly to addresses connected to the defendants.
When customers called up to complain about the devices appearing on their bills, the operators just wrote off the amounts, which totalled (including shipping) $22m.
Catching the miscreants took a while, and apparently is "an example of the strategic partnerships between the Secret Service, the New York State Police, and our private sector partners", according to the Special Agent-in-Charge.
Dealer fraud is a big deal for mobile operators, though all the networks have been cracking down over the last few years, and steps such as the international database of stolen handsets help a lot.
The problem here is that dealers, by necessity, have access to exactly the information needed to impersonate the customer. Therefore the customer, and the network, are both required to trust the mobile-phone shop: which might worry anyone who has visited one. ®