Add to del.icio.us     Digg this

Aug. 8, 2008

T-Mobile USA said today that it is making major progress in its efforts to crack down on prepaid phone traffickers who buy wireless phones in bulk and resell them at much higher prices.

T-Mobile said it obtained two final judgments and permanent injunctions as part of its efforts to combat the problem.

One judgment was entered against defendant Rafiq Wazir Ali, doing business as Fone Xchange, in a federal lawsuit filed in Houston.

The other judgment was entered against ASPAC, its principals and affiliates, by a federal court in Dallas and awards T-Mobile $6.5 million in damages, in addition to a permanent injunction against the defendants.

Because some of the phones still may carry T-Mobile’s brand, consumers might get the idea that they’re buying handsets manufactured for T-Mobile and covered by original warranties, which isn't the case.

In a press release, T-Mobile said it subsidizes its prepaid phones, making them more accessible to consumers who want to become customers. But the traffickers profit by pocketing the subsidies.

They typically buy prepaid mobile phones in bulk from retail stores, remove the original packaging, throw away the warranties and manuals, hack into the software and resell the phones to unsuspecting customers.

T-Mobile said that if the defendants violate the injunctions, the orders provide a mechanism for enforcement by the courts and, in the case of Fone Xchange, carry a minimum charge of $1 million in damages to be paid to T-Mobile.

Various industry prepaid players, such as TracFone, also have dealt with the trafficking problem for years.

Additionally, T-Mobile has at least 6 similar lawsuits pending in federal courts across the country.

Add to del.icio.us     Digg this

    This article was featured on Business 5.0.

Source: T-Mobile USA.