The Growing Issue of Cell Phone Theft

On July 22, I had the pleasure of participating as a panelist at the 2012 NARUC Summer Committee Meetings – my topic was “Combating Wireless Communications Device Theft”.  This may sound like a dry industry issue, but it proved to be quite interesting. My fellow panelists were Brian K. Daly, Director, New Technology Product Development Engineer at AT&T Mobility, and Jackie McCarthy, Director of State Regulatory Affairs for CTIA – Wireless Association who were there to give the industry perspective. I, of course, was was there to represent CUB and to provide the consumer advocate perspective.

The Issue: Police departments and members of Congress have called attention to the growing epidemic of robberies targeting cell phones, particularly in urban areas. To put this issue in perspective, here are some statistics I ran across while researching for the panel:

• A recent survey by Norton indicated that one in three individuals experience cell phone loss or theft.
• That same survey found that the rate is higher in major metropolitan areas, with 49% of respondents in NYC, 44% in LA, and 52% of respondents in Miami experiencing cell phone loss or theft.
• Of the survey’s respondents, 87% indicated that they were unable to lock or clear the memory of their phone remotely after it was lost or stolen.
• The survey also found that the average cost to resolve the issue of a lost or stolen phone is $125.03.
• A Symantec study of 50 Android phones in major cities found that more than 89% of people who found missing phones tried to access sensitive personal information.
• According to statistics cited by the FCC, more than 40% of all robberies in New York City involve smartphones and other cell phones.
• The FCC also stated that in Washington DC, cell phones were taken in 54% more robberies in 2011 than in 2007, and cell phones are now taken in 38% of all DC robberies.
• Finally, the FCC noted that other major cities have similar statistics, cell phones involved in 30-40% of all robberies.
• Stolen smartphones can be quickly resold on the street (or via the internet on sites such as Craigslist, Amazon, and Ebay) and can be worth as much as $600.
• According to Lookout Mobile Security (a company that has produced an app that allows users to remotely lock their phone once they realize it is lost or stolen, and in some cases, to completely wipe the phone and delete all personal data, and also to track the phone using the phone’s GPS from an internet source, among other features), 54% of all smartphone users do not password protect their phones. 36% of people who lose their phone contact their phone operator first.

Current Legislation

HR 4247—Cell Phone Theft Prevention Act of 2012:

• Prohibits a provider of commercial or mobile data service from providing service on a mobile electronic device reported to such provider as stolen (either by the person who holds the account via a police report, or by another provider of commercial mobile or commercial mobile data service)
• Directs providers to make available to account holders the capability of deleting, from a remote location, all information that was placed on such a device after its manufacture

This legislation has received no industry backing to date and is not part of the FCC initiative discussed below.

SB 3186—Cellular Telephone Theft Deterrence Act:

• Makes it unlawful to knowingly alter or remove the identification number of a mobile device, as well as to knowingly use, produce, traffic in, have control of custody of, or possess hardware or software, knowing it has been configured to engage in such conduct
• Exempts manufacturers and those who repair or refurbish mobile devices

CTIA – The Wireless Association has announced its support of this legislation , and it was mentioned in the FCC’s press release discussing the industry initiatives.

Current Industry Action

The FCC announced that the industry has committed to do the following list of actions in an effort to combat this growing issue:

Implement a database to prevent use of stolen smartphones. Within six months, when Americans call their participating wireless provider and report their wireless devices stolen, their provider will block that device from being used again. This system will be rolling out globally using common databases across carriers over the next 18 months.

Encourage users to lock their phones with passwords. Smartphone makers will notify and educate users in the most highly visible ways—through messages on the smartphone itself and through “Quick Start” user guides—about how to use passwords to deter theft and protect their data.

Educate users on lock/locate/wipe applications. Wireless providers will directly inform their customers about how to find and use applications that enable customers to lock/locate/and wipe smartphones remotely.

Public education campaign on how to protect your smartphone and yourself.The wireless industry will launch a campaign, with media buys, to educate consumers on how to protect their smartphones and themselves from crime.

Progress benchmarks and ongoing dialog.The wireless industry will publish quarterly updates and submit them to the FCC on progress on these initiatives.

Issues that still need to be addressed:

• Providers can turn off the voice and data services to the phone, but not the wifi capabilities or other applications that don’t rely on the data network (like music and games), meaning that there is still some use available to the phones. Thus, the incentive to steal a smartphone will still not be completely gone even after all of the proposed precautions are taken.
• The current industry initiative also doesn’t deter the theft of tablets that use only wi-fi connections. Stolen phones can still be sold abroad, meaning that the incentive to steal these devices is not completely diminished under the current plan. There is, however, a call to action to other countries to develop similar databases so that those countries can share information about stolen devices.

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