AT&T sues former employees over unlocked phone scam

20 Sep 2015 | Author: | No comments yet »

AT&T Sues Former Employees For Unlocking The Contract-Bound 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.In a shocking move, AT&T has filed a lawsuit against a phone unlocking company Swift Unlocks and its own employees (former) who were allegedly claimed to install malware on the carrier’s computer servers to illegally unlock thousands of smartphones for a fee.

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. All of the employees in question were assigned at AT&T’s Bothell, Washington center, and had allegedly installed a form of software that launches automated unlock requests via their work computers.

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. 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 in which it accuses two companies, four people and an unknown software developer or developers, of participating in the audacious scheme. 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. 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.

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. 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.

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. If they cannot ensure that the customers will use their services for a sufficient period of time, they cannot recoup the losses from selling the phones at a discount. 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. To accomplish the task, the former employees allegedly installed malicious software into the work computers of the AT&T store where they worked that could unlock the devices with automated requests.

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. Vira, and about 50 others who haven’t been identified yet, are then accused of running programs designed to use the employees’ credentials to access the unlock codes.

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