AT&T obtains injunctions against unauthorised prepaid mobile phone traffickers

AT&T yesterday said it had obtained final judgments and permanent injunctions against defendants in four federal lawsuits filed as part of AT&T's ongoing efforts to combat the unauthorised bulk purchase and resale of its prepaid mobile phones, SIM cards, and accessories.

To date, AT&T has filed 14 lawsuits against companies and individuals in Texas, Florida, California, and New York, to stop such unauthorised resales, which have resulted in 15 permanent injunctions and final judgments totalling $51 million in damages.

AT&T said that it expects to file additional lawsuits as it continues to aggressively investigate and combat the issue.

Prepaid wireless handset diversion is an industry-wide issue. Middlemen typically buy prepaid mobile phones in bulk, remove them from their original packaging, discard warranties and manuals, hack into the phones' software and then resell the phones and accessories to unsuspecting customers at a substantial profit.

As a result of this trafficking, consumers may be misled about the source and origin of their mobile phones, and they are sold phones without their manufacturer's warranties, accessories or user manuals. Because the phones may still carry AT&T branding, consumers may mistakenly believe they are purchasing handsets still covered by original warranties.

''We believe this is wrong, it's illegal, and it's bad for consumers,'' said Judy Cavalieri, vice president of marketing and head of AT&T's prepaid phone products. ''We continue to investigate and will take aggressive action against those we find are involved.''