Pirates rip off US phone companies - Take advantage of low-cost mobiles

By Akshay Venkataiah @ Monday, July 14, 2008 9:30 AM

Section - Telecoms/Mobile

Mobile phone hackers are taking advantage of cheap phones schemes by breaking into and reselling them.

Hackers in South Florida, New York, California, Georgia and Texas are making huge profits by buying up thousands of these low-cost phones for $15 each and tweaking the software so that calls can be made on any network. They then sell the phones all over the world.

The phone companies sell the phones at a loss, in the hope that they can make their cash back when users have to buy additional minutes from them. A TracFone spokesman said there is a lot of profit in phone hacking, as the hacked phones are sold for between $40 and $60 above the discounted TracFone price.

According to SiliconValley.com, the phone manufacturers are fighting back by suing the traffickers. TracFone has filed 39 lawsuits recently and AT&T, Nokia, Virgin Mobile USA and Motorola are expected to do the same. One action by TracFone Wireless has resulted in a criminal conviction in Houston, when a man refused to stop selling the phones. X