T-Mobile USA has obtained four more injunctions against prepaid phone traffickers it argues have been illegally pocketing handset subsidies through illicit resale practices.
Traffickers typically buy or solicit others to buy prepaid mobile phones in bulk from retail stores, remove the phones from their original packaging, discard warranties and manuals, hack into the phones’ software, fraudulently activate the SIM card, and then resell the phones and accessories to unsuspecting customers at a substantial profit.
Since the phones may still carry T-Mobile’s brand, consumers may believe they are purchasing handsets manufactured for T-Mobile and covered by original warranties.
Three of the four final judgments and permanent injunctions were recently handed down by a federal court in Los Angeles. The orders permanently enjoin Platform Enterprises, Delta Games, California Products International and their principals from continuing to traffic in T-Mobile prepaid wireless phones and SIM cards. In addition, two of the judgments each award T-Mobile $5 million in damages.
The fourth judgment was entered by the federal court in Dallas, permanently enjoining Arena Trading and its principal from trafficking in T-Mobile prepaid wireless products as well as awarding T-Mobile $5 million in damages.
“T-Mobile is committed to protecting consumers and our company by shutting down these traffickers,” said Dave Miller, senior vice president of T-Mobile USA, in a statement. “We are pleased by the results in the cases we have completed thus far, and expect similar successes in our other pending lawsuits.”
Each of the final judgments and permanent injunctions permanently prohibits the defendants from engaging in any activities in any way related to the bulk purchase, unlocking or resale of T-Mobile phones and SIM cards and from using the T-Mobile trademark. If the defendants violate the injunctions, the orders each provide a mechanism for enforcement by the courts and a minimum charge of an additional $5,000 in damages to be paid to T-Mobile.
T-Mobile says it previously has been awarded more than $28 million in judgments entered in similar cases. The company also has plans to file more cases soon.