Trafficking in iPhones becomes a major scam in Colorado

Trafficking in iPhones becomes a major scam in Colorado
According to a local television news report, there is a new scam going down in Colorado Apple Stores that requires reps to turn a blind eye to what is going on. Homeless and poor people are being approached by scammers willing to give these desperate people cash, usually about $100 to $200, to walk into an Apple Store and purchase several iPhone units at the subsidized price of $199.99 each. The phones are turned over to the scammers, who unlock them and sell them for as much as $700 each in foreign markets.

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.


source: 9News via SlashGear

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64 Comments

61. schlosserkevin

Posts: 1; Member since: Apr 27, 2014

Furthermore, I work for an excellent third party retailer. We have a system with strong business ethics and superb efficiency. These criminals have caused us to change our policies around iphone sales and retrain on fraud protection to protect the business. I have dealt with these scenarios and people, personally, and didn't realize that they were unaware of what they were doing. Since the training, we only allow one person to activate one IPhone per day, regardless of the circumstances, therefore, if a father of two comes in to activate 3 handsets, he'd have to be turned to a carrier store, or told he could activate one a day for three days. They are also not allowed to use cash to process the transaction. We are protecting the out sourced company's assets, and its guests from hiked pricing. This has been unfortunate for the guest and the business in general.

63. jroc74

Posts: 6023; Member since: Dec 30, 2010

That policy sounds like it sucks. For you guys and customers. These scammers need to be left to rot in the desert somewhere.

46. james1

Posts: 97; Member since: Mar 16, 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: Apr 10, 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: 31809; Member since: Feb 05, 2011

It's ripping, not riping, and beggars, not beggers. C'mon dude, troll correctly.

53. MR-H-

Posts: 116; Member since: Apr 10, 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: 31809; Member since: Feb 05, 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: Apr 10, 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: 31809; Member since: Feb 05, 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.

57. MR-H-

Posts: 116; Member since: Apr 10, 2014

No one takes you seriously on here. I remember when you use to question other users you use to get so many thumbs down. WTF, just for asking or posting you was thumbed down,,,, lmfao

58. darkkjedii

Posts: 31809; Member since: Feb 05, 2011

You were thumbed down, not you was thumbed down. Four commas aren't needed either. We can do this all day.

44. darkkjedii

Posts: 31809; Member since: Feb 05, 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.

43. jcarmstrong23

Posts: 38; Member since: Apr 27, 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.

39. SamDroid unregistered

USA, you got issues

38. maxmppower unregistered

Yeah they use to do this where I work. Emphasis on use to.

35. sabretigger

Posts: 84; Member since: Sep 15, 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?

32. NikkiGirl

Posts: 12; Member since: Apr 27, 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: 7305; Member since: Dec 05, 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: 221; Member since: Sep 10, 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. Make sense?

62. jroc74

Posts: 6023; Member since: Dec 30, 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.

25. Fuego84

Posts: 357; Member since: May 13, 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: 94; Member since: Dec 03, 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: 1207; Member since: Mar 14, 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.

24. downbeat4

Posts: 94; Member since: Dec 03, 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.

23. Sniggly

Posts: 7305; Member since: Dec 05, 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.

20. AfterShock

Posts: 4147; Member since: Nov 02, 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.

16. sprockkets

Posts: 1612; Member since: Jan 16, 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.

13. 0xFFFF

Posts: 3806; Member since: Apr 16, 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: 2967; Member since: Oct 08, 2012

2 homeless peeps would rather get a Samsung Galaxy S5 through Verizon. BOGO deal going on right now.

12. Floyd

Posts: 3; Member since: Apr 26, 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.

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