Former AT&T Employees Sued for Fraudulently Unlocking Phones

20 Sep 2015 | Author: | No comments yet »

AT&T Phone Unlocking Scheme: Decentralization is the Answer.

Many of these unlocked phones were then resold, allowing those involved to make some cash on the side and pay off the AT&T employees involved in the unlocking. 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. Marc Sapatin, Nguyen Lam, and Kyran Evans may have to face off against AT&T in court for allegedly installing malware on AT&T computer systems to unlock hundreds of thousands of AT&T-supported mobile phones.

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. The mobile phone company has very strict unlocking policies, which it defends by claiming that its locked phones allows it to make devices cheaper for consumers and ensure revenue through long term contracts. 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. 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. 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.

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. 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. 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. 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. In addition to Sapatin, Lam and Evans, AT&T said that there were 50 “John Doe Defendants” with unknown names that developed the software used to gain access to the company’s computer systems.

The malware allegedly sent a bunch of proprietary and internal AT&T information to the the aforementioned defendants and up to 50 other “John Doe defendants” AT&T names in its complaint, which they would then use to tweak said malware, pass off to Evans, and have her reinstall on AT&T’s systems. The mobile carrier also emphasized that the unlocking scheme did not compromise any customer information nor exert any negative effects on its customers. AT&T’s complaint asks for both financial damages, which will be determined later, as well as injunctions to prevent the defendants from continuing on with what they’re alleged to have done. It would of course be much cheaper and efficient to buy phones directly from the manufacturers and connect directly to some non-proprietary cellular and data network. With the advent of technologies like meshnets and TOR-like networks, it is not too much of a stretch to envision a future where consumers do purchase phones straight from manufacturers rather than carriers.

These phones would have have decentralized communications software pre-installed, or would connect to a node-based network styled after the Bitcoin network.

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