AT&T launches lawsuit against 3 ex-employees in ‘unlock’ cellphone scheme

20 Sep 2015 | Author: | No comments yet »

AT&T Sues Former Employees for Phone Unlocking Scheme.

AT&T is suing three former employees who the telecommunications giant claims were paid by another company to place malicious software programs on AT&T phones, PCmag.com reported. If you work at an AT&T store, but moonlight on the side by helping other resellers fraudulently unlock AT&T phones (through AT&T’s own systems), then odds are good at AT&T isn’t going to be very thrilled with you. 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. 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. When a phone is unlocked, according to the complaint, “it can be used on multiple carrier systems rather than exclusively with AT&T,” a change which cuts directly into the heart of AT&T’s business model.

This created a profit motive to enable easier unlocking, and a company called Swift Unlocks, which AT&T is also suing, made a business of unlocking AT&T phones. District court, the three “perpetuated the Unlock Scheme by creating, distributing, and placing on AT&T’s computer systems a ‘malware’ program designed to fraudulently, and without authorization, transmit unlock requests that unlocked hundreds of thousands of phones from exclusive use on AT&T’s network.” Of course, they didn’t do this for free. The company first noticed the scheme when it saw a noticeable uptick in the number of unlock requests issued by two call-center employees, often within milliseconds of each other. A report from an online company said that AT&T alleged that another party, Prahshant Vira, who is the owner of a company names Swift Unlocks and paid Evans a minimum of $20,000 for her to put the malware programs on the protected computer systems of AT&T to secure the fraudulent unlocks. Sapatin told at least one other AT&T employee he was trying to recruit that he knew an individual that had paid to develop software designed to unlock phones.

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. The lawsuit describes comprehensive details of the scheme, with the defendants making a profit of between $10,000 and $20,000 in the illegal activity. Allegedly, Sapatin promised the employees at AT&T that they would make $2,000 in two through participating in unlocking the phones, read the court complaint of AT&T. 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.

The malware is alleged to have sent a number of internal and proprietary AT&T information to the defendants and as many as another 50 defendants called John Does in the complaint by AT&T. The breach is all the more significant given the revelation last month that AT&T handed over more than 1 billion domestic cellphone calling records per day to the NSA since 2011.

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. The multinational telecommunications company has asked for both financial damages, as well as injunctions to prevent the defendants from continuing with the illegal scheme. The company site describes why a mobile device user would want to unlock it, saying it makes it possible to switch carriers to take advantage of promotions, and it can make switching SIM cards for international travel easier.

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