AT&T Inc. Sues Former Employees For Illegally Unlocking Phones

19 Sep 2015 | Author: | No comments yet »

AT&T Inc. Sues Former Employees For Illegally Unlocking Phones.

AT&T said three of its employees secretly installed software on its network so a cellphone unlocking service could surreptitiously funnel hundreds of thousands of requests to its servers to remove software locks on phones.Three ex-AT&T employees have been sued by the carrier, which claims they had assisted thousands of subscribers in getting their phones unlocked, allowing the phones to work on any other wireless carrier.AT&T has now filed a lawsuit against 3 of their former mobile phone sales reps in Washington accusing them of helping thousands of customers to unlock their mobile phones.

The locks prevent phones from being used on competing networks and have been an important tool used by cellular carriers to prevent customers from jumping ship. The company would sell unlock codes for anything from an iPhone to a Fire Phone, letting AT&T customers wriggle out of their contracts long before the subsidy was paid off. California-based Swift Unlocks, which allegedly orchestrated the scheme and in turn sold the illicit unlocking services to AT&T customers, is also being sued.

The lawsuit also includes an IT company, Swift Unlock, which was involved in the scam and helped the employees steal unlocking codes for the phones, which were then sold to customers. All of the employees in question are located outside of the Seattle area, and had allegedly installed a form of software that launches automated unlock requests via their work computers. Consumers are legally allowed to request that their carrier unlock their phones — once they’ve been paid off in full — so that the phone can then be connected to a competing carrier’s network. They can be electronically removed, usually after fulfilling a contract obligation, but many websites offer the same service for a small fee with no questions asked.

The unlocking of smartphones has been a hotly debated issue as the Federal Communications Commission has introduced new rules over the past few years. Most carriers, including AT&T, often sell phones at discounted rates because they know they can recoup that money by selling their own wireless services for the devices.

District Court for the Western District of Washington by AT&T, states that the three employees had partnered with Swift Unlock, and installed its software on their computers, which allowed the IT company to gain access to their machines and steal information needed to generate the unlock codes. Named in the lawsuit are the three former salespeople, whose names were not released to the press, and Anaheim-based Swift Unlocks, a company that the employees supposedly worked with.

This software allowed them to make requests automatically to unlock devices which allowed customers to use them without being bound by the AT&T contract. AT&T claims Swift Unlocks paid AT&T employee Marc Sapatin $10,500 and Kyra Evans $20,000 to install unlock software in the carrier’s systems while they worked at an AT&T call center in 2013. Once you’ve paid off your wireless contract, the FCC now requires carriers to give customers an unlock code that will allow them to take their device to another wireless provider — if they so choose. This is a very issue for carriers as it can result in huge losses, apart from breaching the contract, the customers had made with the company when purchasing the phone.

The carrier first discovered something was amiss in September 2013 when a surge in the number of unlock requests alerted the company to the possible abuse of “Torch,” the software used to unlock cellphones, it said in the complaint. The carrier, the nation’s second largest, says the defendants created a software program that allowed an external server to issue unlock permissions to AT&T phones. Upon investigation, the company discovered that the logins and passwords of two employees at a center in Washington were responsible for a large number of the requests and those requests happened within milliseconds of each other.

According to the lawsuit, the employees were careless when running their scheme, having profited but also having failed to “cover their tracks.” Each of the workers had reportedly earned between $10,000 to $20,000 from Swift Unlocks prior to getting caught, and had left a proverbial trail of crumbs that proved they were able to unlock thousands of phones in “milliseconds.” On the computers of Evans and Sapatin, investigators found unauthorized software intended to route unlocking requests from an external source through AT&T’s computer system, it said. Unfortunately for the accused, those requests were still being made under their own employee codes, so the company quickly traced the new requests back to them. “It’s important to note that this did not involve any improper access of customer information, or any adverse effect on our customers,” an AT&T spokesman told The Verge. These employees made huge profits but apparently weren’t able to cover everything properly and left evidence they were unlocking these devices in milliseconds.

AT&T says its investigators uncovered numerous iterations of the software, which grew in complexity until it was eventually able to submit the automatic requests. During the same period, AT&T was hacked by a criminal organization looking to unlock stolen phones before selling them, a breach that also resulted in a $25 million fine from the FCC. On the company’s website, it describes why someone would want to unlock a phone, saying it can make switching SIM cards for international travel easier, allows you to fetch a higher price when reselling your phone and makes it possible to switch carriers to take advantage of promotions.

The lawsuit provides detail of the unlocking scheme with the reps making anything between $ 10000 and $ 20000 through the activity before being caught. The carrier names Kyra Evans, Nguyen Lam and Marc Sapatin as former customer call center employees who knowingly installed malware on company computers to give Prashan Vira, who runs Swift Unlocks, remote access to the machines.

If AT&T manages to win the case, the defendants will be required to pay the money the company has lost, as well as the money they had made from the scheme. According to Bloomberg, three people familiar with the situation have reported that Exxon shale-drilling unit’s executives are meeting up with a small group of producers in the Permian Basin. The company, last year introduced a new technique which offers operators a ration or percentage of future gains instead of a one-time upfront stock or cash payouts.

According to Bloomberg’s sources, who asked for anonymity due to the nature of the talks, the oil player is hoping to once again implement last year’s strategy in the region. The grim reality is that drillers must either shut down operations and rigs to preserve capital and weather the storm or, they may choose to let a more financially stable company take over to survive. A senior hedge-fund manager, Ted Harper; who also partially supervises Houston-based Frost Investment Advisors LLC valued at $10 billion, talked to Bloomberg.

The cluster of oil fields under Texas and New Mexico are so extensive that they pump more oil than fifty percent of the nations that are a part of the Organization of Petroleum Exporting Countries. This is possible because the company will not be utilizing its stockpiled common shares to finance the purchase thus, individual portfolios will experience zero dilution. After the acquisition of XTO on the basis of its enticing shale expertise, Exxon has trusted the corporate buy-out technique in order to expand its holdings.

And the year after that, the multinational oil firm paid a sum of $1.69 billion for TWP Inc. and Phillips Resources Inc.who were closely held Marcellus Shale drillers. Permian oil producer, Endeavor Energy Resources LP controlled by Texan Autry Stephens, was the first to agree to the oil major’s proposal before the initiation of the downturn. In February 2014, the deal was announced in which Exxon committed itself towards financing the exploration of a few of Endeavor’s properties in two separate Texas counties in compensation for “substantial operating equity.” The area it envelops is more than 40 times the size of Central Park in New York, across a 34,000 acre region.

In addition to that, even with the oil price slump and the talks revolving around the Permian Basin; Exxon is extending its activities into North Dakota and Oklahoma to increase production.

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