Tuesday, September 16, 2014

Going Apple Picking: The Rise of Cell Phone Thefts in Major Cities, and the Industry Fueling It

People tell me I don’t have the world’s greatest survival instincts.  I can’t really say that they’re wrong.  I spent most of my life growing up in rural New York, about thirty minutes outside of Buffalo.  Our local paper put out alarming headlines about town youths kicking the railings out of the park gazebo, and when I was in middle and high school, I remember not one – but three annual school-wide assemblies castigating us for the cardinal scourges of pencil-based bathroom graffiti and “freak dancing[1].”

Anyways, transport this same kid to inner-city Baltimore a few years later and the story pretty much writes itself.  But my editor tells me that I have a word minimum for each of these posts so I’m going to write it anyway.  I decided to go out one night in Federal Hill, which is what realtors call an “entertainment district,” after a particularly harrowing week at the Baltimore City State’s Attorney’s Office.  I figured my apartment, just under a mile away, outside of Johns Hopkins Hospital, wouldn’t be too difficult a walk.  Like I said, my life experiences from living in Clarence, New York and Albemarle Street haven’t exactly turned me into a street samurai[2].

Making my way through the streets of Baltimore, I’m approached by a local with a rather surly disposition.  He asked to see my phone, and I complied.  As much as I love statistics, I’d rather not become one.  I handed over my Windows Phone, and he turned it on.  He then asked, somewhat impolitely, what it was.  After he found out that my phone, a Nokia model that was state-of-the-art at the time that Jersey Shore was considered a novel form of entertainment, he tossed it back and suggested that I do something rather anatomically impossible with myself.  Subsequent letters to Microsoft suggesting an ad campaign “Windows Phones: Not Worth Stealing,” have gone unanswered.

I was not alone in being accosted for my phone.  This year cell phones theft accounts for one in three street robberies.  In San Francisco, it makes up four in every ten street robberies.  In New York City, cell phone thefts make up fully half of all street robberies.  Today, cell phone theft now accounts for fourteen percent of all major crimes committed in New York City.  NYPD Commissioner Ray Kelly places the blame for New York’s spike in crime specifically on theft of Apple products.

In response to this growing trend, police officers have increased the size of their organized crime departments in an effort to combat the small-time neighborhood crews pulling these thefts.  CTIA – The Wireless Association has teamed up with the FCC to create an expansive database of cell phones to allow for better tracking of the devices, and allow the user to remotely “kill” the phone following its theft.  An alternative use of the system, allowing Bruce Wayne and Morgan Freeman to use phones to create electronic maps of every city with cell phones is – at this point – purely speculative.

Apps like “Find my iPhone,” and “Activation Lock,” a personal kill switch, have surged in popularity.  However, these apps do little to actually address the issue, specifically because these phones can be sold back for profit, regardless of condition.  Easy money is to be made, not in using stolen phones, but in selling them.  Companies like Gazelle.com advertise on daytime TV, and offer quick cash for cell phones in any condition.  Kill switches are a pretty substandard deterrent when a company is willing to offer up to a hundred dollars in easy cash for a phone that doesn’t even turn on.

Too lazy or not tech-savvy enough to deal with an online fence?  No problem, just take your ill-gotten cell phone to the nearest mall, and stick it into devices that are innocuously called “EcoATMs.”  These are kiosks throughout the country, resembling ATMs that a person can simply put a cell phone in, regardless of condition or charging state, and receive an immediate payout.  For a top-of-the-line phone, EcoATM’s are able to pay out hundreds of dollars.

Now, EcoATM’s parent corporation, Outerwall, pays lip service on their website towards cooperation with law enforcement.  They tout their “extensive security processes,” in place to prevent the sale of stolen phones.  These “extensive processes” amount to asking the seller to scan their driver’s licenses, and taking a picture of the seller.  An investigation by Baltimore journalists have shown that the machines are unable to identify between a white woman and an Indian woman ten years younger than her.  I have a hard time calling something an “extensive security process” when it can’t even draw the same distinctions that my ninety year-old, legally blind great aunt is capable of.

Philadelphia was the first city to ban EcoATMs, with Baltimore and DC quickly following suit.  There is a huge market to be made abroad for secondhand phones, and companies like Outerwall are making money hand over fist... and that metaphor kind of seems rather pointed when there’s people getting their heads split open for Outerwall’s profits.  

The most odious element of this problem isn’t born from Outerwall or Gazelle though.  George Gascón is the San Francisco District Attorney, and worked with California and New York Lawmakers to adopt plans to better proliferate kill switch technology.  According to Gascón, the stiffest opposition to this development, however, has come from cell carriers themselves. And why wouldn’t it?  Even though the Outerwall makes money on every cell phone sale – stolen or otherwise – AT&T, Sprint, and Verizon have brought in almost four billion dollars in revenue from selling cell phone insurance. 

Law enforcement officers and prosecutors are facing an even bigger hurdle in breaking up cell phone theft rings. Consumer databases, have proven largely ineffective in fixing the issue and many of the phones make their way overseas, where recovery for evidence purposes is virtually impossible.  Ultimately, the real kill switch that needs to be thrown is the one attached to the gross profiteering from theft that marks this industry.

Travis Nemmer
Staffer, Criminal Law Practitioner

[1] For the record, I still do not know what this is, and I am fairly certain that I did not partake in it. Your humble author was apparently not particularly popular in High School. Editor’s Note – Or in Law School.
[2] My predilections towards referencing 1980’s Pen-and-Paper roleplaying games probably explains a lot about the above footnote. Editor’s Note – “Probably?”

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