T-Mobile USA has obtained two final judgments and permanent injunctions as
part of the company's ongoing efforts to combat the unauthorized bulk purchase
and resale of T-Mobile prepaid mobile phones.
On
defendant Rafiq Wazir Ali, individually and doing business as Fone Xchange, in
a federal lawsuit filed in
The other judgment was entered against ASPAC Inc., its principals and
affiliates, by a federal court in
and awards T-Mobile $6.5 million in damages in addition to a permanent
injunction against the defendants.
T-Mobile subsidizes its prepaid wireless phones making them more accessible
to consumers who want to become T-Mobile customers. Traffickers such as Ali,
Fone Xchange and ASPAC profit by pocketing those subsidies, preventing
consumers from receiving the benefit of the subsidies and depriving T-Mobile
and other wireless providers of new customers. 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, and resell the phones and accessories to
unsuspecting customers at a substantial profit.
Consumers are sold phones without the manufacturer's warranties, accessories
or user manuals. 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.
The stipulated final judgments and permanent injunctions, entered by Judge
Lee H. Rosenthal of the Southern District of Texas and Judge Jane J. Boyle of
the Northern District of Texas, respectively, permanently prohibit the
defendants from engaging in any activities in any way related to the bulk
purchase, unlocking or resale of T-Mobile phones and from using the T-Mobile
trademark. If the defendants violate the injunctions, the orders provide a
mechanism for enforcement by the courts and, in the case of Fone Xchange, carry
a minimum charge of $1 million in damages to be paid to
T-Mobile. Muhammad "Mubi" Mubishir, a defendant who violated a
similar injunction in
federal court, recently pled guilty to criminal contempt of court and is
scheduled to be sentenced by U.S. District Court Judge Melinda Harmon on Oct.
10.
T-Mobile has six additional lawsuits pending in federal courts across
the country, as part of its concerted effort to protect consumers from prepaid
phone trafficking, and has plans to file additional cases soon.