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Jun. 5, 2009

On top of the three last injunctions it got last month, T-Mobile has obtained four new ones against prepaid phone traffickers that T-Mobile argues have been illegally pocketing wireless handset subsidies through illicit resale practices.

Overall, phone traffickers typically buy or solicit others to buy prepaid mobile phones in bulk from retail stores, remove the phones from their original packaging, discard warranties and manuals, hack into the phones’ software, fraudulently activate the SIM card, and then resell the phones and accessories to unsuspecting customers at a huge profit.

T-Mobile has been saying that it wants to stop the practice for good, and these four new injunctions are proof of that.

Three of the four judgments and permanent injunctions were recently handed down by a federal court in Los Angeles. The orders permanently enjoin Platform Enterprises, Delta Games, California Products International and their principals from continuing to traffic in T-Mobile prepaid wireless phones and SIM cards.

Additionally, two of the same judgments each award T-Mobile up to $5 million in damages.

Since the mobile phones may still carry T-Mobile’s brand, consumers may believe they are purchasing handsets manufactured for T-Mobile and covered by original warranties, but that's not the case at all.

The fourth judgment was entered by the federal court in Dallas, permanently enjoining Arena Trading and its principal from trafficking in T-Mobile prepaid wireless products as well as awarding T-Mobile another $5 million in damages.

Each of the final judgments and permanent injunctions permanently prohibits the defendants from engaging in any activities in any way related to the bulk purchase, unlocking or resale of T-Mobile phones and SIM cards and from using the T-Mobile trademark.

If ever the defendants violate the injunctions, the orders each provide a mechanism for enforcement by the courts and a minimum charge of an additional $5,000 in damages to be paid to T-Mobile.

Dave Miller, senior v.p. of T-Mobile USA said “T-Mobile is committed in protecting consumers and our brand by shutting down these phone traffickers. We are pleased by the results in the cases we have completed thus far and we also expect similar success in our other pending lawsuits.”

T-Mobile says it previously has been awarded more than $28 million in judgments entered in similar cases.

T-Mobile USA also has plans to file more similar cases in the next few months as well.

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Source: T-Mobile USA.