Trafficking in iPhones becomes a major scam in Colorado
The victims, who are approached at homeless shelters or blood donation centers, are given the cash to pay for the phones, in addition to the money that they are promised. They are told that they can cancel the contracts within three days. When they can't rescind the signed purchases, the victims are left with a huge monthly debt that they cannot afford. One 19 year old female by the name of Pheonix was desperate for money to pay her rent, which was due the next day. She thought it was a lucky break when she was offered the cash to go into the Apple Store to buy the phones. She now has $6000 of debt that she is responsible for.
In another case, two people will be facing a misdemeanor charge of deception, for tricking a mentally handicapped man into buying several subsidized iPhones at a store near Denver. The handicapped man was allegedly paid $30 per phone by Casey Parker of California and Erin Chamblee of Denver. That pair is known by police for bringing homeless people into Apple Stores to purchase subsidized handsets, which they turn around and sell for hundreds of dollars more in foreign markets. This leaves their victims on the hook for the monthly charges.
Some believe that Apple Store reps are partially to blame. In one case, the victim paid for the phones and signed the paper work, and the units were handed by the rep directly to the scammer. You might also ask yourself if Apple should make reps question cash purchases for a large number of iPhones. But because the store is making money, Apple Store employees seem to be closing their eyes and ignoring the situation.
You can check out the local Denver television station's report on what is being called "credit muling" by watching the videos below.
iPhone trafficking becomes a big problem in Colorado
source: 9News via SlashGear
1. hafini_27 (Posts: 239; Member since: 31 Oct 2013)
Damn, they trick poor people who have no money to pay for such high debt. How cruel!
18. Topcat488 (Posts: 1120; Member since: 29 Sep 2012)
As you can see and read, not only should Apple feel ashamed, those that represent the company and turn a blind eye should go to jail. Crooks all of them a money hungry Co. O.o
19. networkdood (Posts: 6260; Member since: 31 Mar 2010)
Well, I think my brother who did work for AT&T dealt with this with other devices, but, iphones, too....
29. james004 (Posts: 471; Member since: 15 May 2013)
he is just selling these in india to those indian!
30. kosal (Posts: 14; Member since: 19 Oct 2013)
He is not an Indian....his name is "Benji karmania"....which nowhere comes close to Indian names
36. suhas2000 (Posts: 13; Member since: 24 Jul 2008)
You have shown your ignorance, nothing else needs to be said here!
47. tacarat (Posts: 128; Member since: 22 Apr 2013)
Because the first thing everybody wants is to be loudly accused of discrimination. "My money isn't good enough? I'm too stupid? What gives you the right to judge? ". Prosecuting con artists and firing the salespersons who didn't properly explain the return policy and requirements would help. Management should be giving warnings about the scams to staff. The bad PR overshadows the profits.
22. PapaSmurf (Posts: 7589; Member since: 14 May 2012)
This is so petty of these crooks. My heart goes out to those in need.
37. Teja171 (unregistered)
Really ? I thought that you would keep fingering them too.
What an irony !
27. Ashoaib (Posts: 1250; Member since: 15 Nov 2013)
No wonder when workers commit suicide at apple's foxconn facility in china due to cruel working conditions and apple is making huge profit by keeping manufacturing cost low on workers blood, they can even be a part of ripping off homeless people
28. Ashoaib (Posts: 1250; Member since: 15 Nov 2013)
This guy above in the photo is homeless or a scammer?? looks like homeless indian instead of homeless american
42. alexandrecastro (Posts: 18; Member since: 23 Feb 2014)
He's the scammer, just watch the video
48. Ashoaib (Posts: 1250; Member since: 15 Nov 2013)
Aah! I just watched the video now on a computer, it was not playing on my phone... he is a filthy scammer
3. dontneedtoknow (Posts: 146; Member since: 17 Feb 2014)
That's so bad!! I hope they get caught!
4. wilsong17 (Posts: 771; Member since: 10 Mar 2013)
lol and now we know why the iphone is popular in america
dun dun dun
14. Ninetysix (Posts: 1420; Member since: 08 Oct 2012)
lol...then which iPhones are getting sold in foreign markets?
5. 0xFFFF (Posts: 2384; Member since: 16 Apr 2014)
How do these homeless people sign up for a plan for a subsidized phone? They usually will have bad or no credit. It seems that the Apple staff must be complicit with this scam. I guess this is how desperate Apple is now for sales.
17. PBXtech (Posts: 967; Member since: 21 Oct 2013)
I was wondering that too.
Address: local park, third sleeping bag from the left.
Someone better get fired over this.
6. Kwiss1200 (Posts: 7; Member since: 12 Apr 2014)
Most homeless people have bad credit.. If it sounds to good to be true, it is.....
7. Taters (Posts: 2639; Member since: 28 Jan 2013)
Apple does stuff like this, they just do it legally. However they do it pretty shady with somehow winning 1 billion from Samsung for packaging and rounded corners. And getting Obama to veto the ban.
45. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
Dude stay on topic, that was a pathetically weak jab.
49. MR-H- (Posts: 116; Member since: 10 Apr 2014)
Dude try to merge on the topic to validate a good discussion, rather than telling others what you think or believe.
Try to be more inclined and expressive than being jelly and stop with you're bla bla.
That was truthful and honest jab.
50. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
Nahhh, that was stupid actually. You also should've said (your), not "you're". You're not to smart are you?
55. MR-H- (Posts: 116; Member since: 10 Apr 2014)
off topic dude, ,,,, can't you stay on the subject? You looking for errors on my posts? What good will this be to you? Smart... a middle aged guy like you should contribute to others and to the article, instead you look for illogical things like "words" on other's making mistake.
Old man grow up act your age, not like a kid.
Anyone says honest truthful and finds negative about Apple is a troll or you calling others pathetic weak jab..../ Listen old man be honest and not a fanboy, cause no one on here takes you serious cause no one actually likes you on PA. Fanboys are never to be taken seriously,
59. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
Dude, do you honestly think I give a **** who likes me on this site? I live in the real world, not on this site. I can't believe you actually posted that crap. Ask around this site, and see how many others care if random people, they know nothing about like them.
8. SIGPRO (Posts: 403; Member since: 03 Oct 2012)
Apple should know about this, i think they know but they don't care they only think about money! Apple you suck!
9. techloverNYC (Posts: 382; Member since: 20 Nov 2012)
This is what happens when people don't read their contract agreements. I used to use an iphone and with every update there is like 100+pages of contract agreements with tiny letters for you to read. In real life no one reads all the tiny details on there and Apple knows people don't read the detail. The people at the Apple store should have done a better job explaining the cons instead of the pros of the contract to the customers. Screw big company and their long and boring contract agreements.
11. gorkapr (Posts: 44; Member since: 23 Aug 2012)
In puerto rico, we have that problem too, not onlywith iphones, with almost any phone with any mayor company.
21. PapaSmurf (Posts: 7589; Member since: 14 May 2012)
There's a lot of problems in Puerto Rico. Let's just leave it at that lol.
12. Floyd (Posts: 1; Member since: 26 Apr 2014)
This isn't solely an apple issue; this is happening everywhere in the U.S and is quite common in the cell phone industry. People will find someone that is down on their luck and in need of some quick cash and use them to sign up for as many lines as their credit report will allow.
To say that this is something Apple is aware of and allowing is absurb
I work at a third party store selling phones and I turn away people on a weeking basis trying get phones that I know are trying to commit fraud. Unfortunately many stores either do not care or are not trained to spot this type of crime.
13. 0xFFFF (Posts: 2384; Member since: 16 Apr 2014)
I was thinking about this again and I realized Apple is missing out on a great marketing campaign.
Since all these homeless people can get iPhones, Apple can make a commercial showing how the lives of the homeless are so much better with iPhone. Imagine a homeless man tracking the money he brings in from begging with Mint. Finding his way to the nearest homeless shelter with Apple maps. Checking in at a street corner with 4chan letting other homeless people he's got dibs. Or reviewing the local homeless shelters using Yelp. Or finding the best soup kitchen in town using Urbanspoon. Apple can show that an iPhone can be your home when you have none.
Introducing iHome: a collection of apps that is your home away from home. Brought to you by Apple. Because we care.
15. Ninetysix (Posts: 1420; Member since: 08 Oct 2012)
2 homeless peeps would rather get a Samsung Galaxy S5 through Verizon. BOGO deal going on right now.
16. sprockkets (Posts: 1146; Member since: 16 Jan 2012)
" The phones are turned over to the scammers, who unlock them and sell them for as much as $700 each in foreign markets."
Well they can perhaps sim unlock them but good luck trying to "unlock" them from apple, because you can't. Apple can and should turn them into expensive bricks soon.
20. AfterShock (Posts: 2490; Member since: 02 Nov 2012)
So, I find it odd how someone with no or poor credit can just sign up, probably without current ID as well?
There can't be too long of a paper trail to find out whom let these into the system.
Sounds like a fable to me.
23. Sniggly (Posts: 6743; Member since: 05 Dec 2009)
Lol, nice to see that Apple turns a blind eye to the same kind of scams that Best Buy turns down in a heartbeat. This happens all the time with all types of phones, usually free or low cost ones that have SIM slots and can be unlocked. Since Best Buy gets hit with the bill if the scammers rescind on the contract, they're not so inclined to let the shady contracts go through.
However, I'm sure Apple has found a way to make sure they're not held responsible for contracts like these, so they don't give a damn.
24. downbeat4 (Posts: 67; Member since: 03 Dec 2010)
This was happening at VZW once the iPhone 5 came out. After some major loses, due to cancelations and charge backs in the Agent Channel, we were able to start pinpointing the scammers and had to start walking people. It's tough to walk new activations when your a Sales Representative, but we do it.
25. Fuego84 (Posts: 262; Member since: 13 May 2012)
I don't see how the stores are making money if they're only getting the $199.00 unless that amount makes a profit on the iPhone which I think not.
26. downbeat4 (Posts: 67; Member since: 03 Dec 2010)
They're paid a commission from the carrier, but when these scumbags are successful, that commission is taken back. It has been killing businesses.
31. xfire99 (Posts: 428; Member since: 14 Mar 2012)
Apple are making money, they get full price for each iDevice sold and carriers are taking the hits by subsidize for each iDevice sold on contract. But carriers dont get any incomes by homeless that have no money to pay.
32. NikkiGirl (Posts: 5; Member since: 27 Apr 2014)
Don't they do credit checks in America? I mean how is a homeless person suppose to pay for a phone contract. A homeless person would never be able to go on a phone contract here in Australia.
34. Sniggly (Posts: 6743; Member since: 05 Dec 2009)
That's what I wondered myself, but a homeless person isn't necessarily going to have *bad* credit. They may just have *no* credit, in which case the carrier may still grant the credit check a pass. As for the up front cash, that's fronted by the scammers since they still pull a profit.
40. Jommick (Posts: 178; Member since: 10 Sep 2013)
Hi, I work as a contractor for AT&T at a call centre handling new activations. In my own personal experience, I have yet to see anyone with little to no credit pass a credit evaluation without a deposit required. Personally, even if they pass, I have a hard time ethically completing the ordering process, so in most cases I won't.
Also, as some speculation as to why there is little being done about this: businesses still make money.
AT&T (or any other subsidizing carrier) still pays Apple for the phone.
The company receives payment for the subsidized price.
The company bills service charges.
When the bill goes unpaid for a certain period of time, service is suspended for non payment.
If suspended long enough without payment, the bill goes into a cancelled status and applicable ETFs, late payment charges, etc. are applied to the bill. If it remains unpaid, then the company sells it to a collections agency to recoup the cost of the devices and turn a profit regardless.
62. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
I was gonna say....in my experience...no credit = bad credit. So much so I had to use Rent a Center just to establish some credit many years ago.
I dont know how things are now...but even if my credit takes a hit..I still get and get accepted for credit card offers, cable service with no deposit, etc. I even somehow got a very low % rate on a new car.
The dealership must have been giving it away at that time...lol.
35. sabretigger (Posts: 21; Member since: 15 Sep 2012)
sh*t like this makes me crazy... the stupidity of some individuals to fall for something like this? and as others have stated above, how do the homeless get a contract?
btw, PA, what's with the pic of the asian guy used for this article?
38. maxmppower (Posts: 48; Member since: 16 Aug 2013)
Yeah they use to do this where I work. Emphasis on use to.
43. jcarmstrong23 (Posts: 1; Member since: 27 Apr 2014)
This is nothing new, I work for an AT&T store and this kind of stuff happens ALL the time. you can normally tell when someone is trying to commit fraud. one Saturday I had one ring leader just keep dropping off people to our store to start new service. it is pretty easy to keep this stuff from happening. I can understand Reps turning a blind eye though, we have goals to meet and that pressure can be great sometimes.
44. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
Fire and prosecute those reps, if they're found to be in on it. Apple should take this as serious as they take their lawsuits. This ain't cool at all, and eat the bill too. They have the money.
46. james1 (Posts: 60; Member since: 16 Mar 2013)
I don't know why the police weren't there, he was scamming people and everybody was ok with it, the apple employees, the mall security, and apple itself was ok with it. This is the lowest you could go, stealing money from poor and needy people, how cruel.
51. MR-H- (Posts: 116; Member since: 10 Apr 2014)
Apples new business for riping customers and poor people.
wow Apple says no comment.
So desperate Apple for profits that they even rinse money from beggers.
52. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
It's ripping, not riping, and beggars, not beggers. C'mon dude, troll correctly.
53. MR-H- (Posts: 116; Member since: 10 Apr 2014)
How the hell am i trolling, when Apple isn't saying jack, no comments.
Apple being in business with crooks helps Apples sales and capital shares unplumetting....
More like you are trolling and siding you're beloved company, even this new idear by Apple which they deny that you believe there not involved makes you feel great?
54. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
Unplumetting, should be stop plummeting.
You're, should be your.
Idear, should be idea.
There, should be their.
When speaking of your self, use a capital I.
56. MR-H- (Posts: 116; Member since: 10 Apr 2014)
bla bla bla off topic.
i forgot i'm talking to a kid who always looks for off topic flame wars.
What a smart classic troll you are.
Say's the guy who spells "Apple with a smal "a" then "A". Spells Android with small "a" lmfao.
i remember your posts...
60. darkkjedii (Posts: 10263; Member since: 05 Feb 2011)
I won't reply to anymore, until your spelling is correct. You have horrible grammar, and need to correct it. Bye bye, or as you'd put it by buy.