HotCellularPhone.com

TracFone Wireless Inc. says today’s guilty plea by an international trafficker of prepaid mobile phones is an important milestone in the industry’s battle against the bulk prepaid phone purchasing scheme throughout the U.S., an activity that includes altering the phones’ proprietary software, repackaging the devices and then reselling them domestically and abroad to unsuspecting customers.
 
Muhammad Mubashir, 27, of Sugar Land, Tex., pleaded guilty today before Judge Melinda Harmon of the U.S. District Court for the Southern District of Texas to charges of criminally disobeying a federal court order prohibiting him from continuing to purchase, tamper with or export prepaid mobile phones.

Prepaid phone trafficking is a nationwide concern for the wireless industry because it has the potential to drive up costs to consumers. To make wireless service affordable and accessible for everyone, TracFone heavily discounts the retail price of its phones far below its own cost, but expects to recoup its investment by providing service to customers through the sale of airtime cards and other services.

Schemes like those organized by Mubashir exist across the country and involve groups of “runners” who purchase prepaid mobile phones from major retail outlets. The phones are then passed to middlemen who alter or remove the prepaid software and resell the altered phones as “new” at a significant profit to unsuspecting customers domestically and abroad in Latin America, Asia and the Middle East.

Related posts

• Trackfone Wins $1M in Legal Case Against Phone Unlockers (14)
• FCC Says TracFone Can Participate in Low-Income Phone Service Program That Reimburses Carriers (0)