T-Mobile USA announced it obtained a final judgment and
permanent injunction to combat the
unauthorized bulk purchase and resale of T-Mobile's prepaid mobile
phones and accessories.
The order, handed down by a federal court in Brooklyn,
N.Y., permanently enjoining DK Wireless Inc. (which does business as
"Wireless Touch" and "Talk 2 Me"), IA Communication, Inc, and the
companies' principal, Ajay Mehta, from continuing to traffic in
T-Mobile prepaid wireless phones. The judgment also awards
T-Mobile $5 million in damages against the corporate defendants.
T-Mobile USA subsidizes its prepaid wireless phones in order to make
them more accessible to legitimate consumers who want to become T-Mobile customers. Traffickers Mehta, Wireless Touch, Talk2Me, and IA
Communications profited 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 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 then
resell the phones and accessories to unsuspecting customers at a
substantial profit.
Currently T-Mobile has prepaid
phones starting at $19.99 with minutes ranging from 10 cents a minute on the dollar a day plan or 30 minutes for $10.00 with per minute rates decreasing the more time bought.
The T-Mobile says that consumers are harmed and may be misled about the source and origin
of their mobile phones, and they are sold phones without their
manufacturer's warranties, accessories or user manuals. Because 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.
"T-Mobile is committed to protecting consumers and our company by
shutting down these traffickers," said Dave Miller, senior vice
president and general counsel, T-Mobile USA. "We are pleased by the
results in the cases and the impact they have had on reducing this
fraudulent trafficking activity. T-Mobile remains committed to
prosecuting other similar offenders and is taking steps to investigate
and prosecute additional and ongoing fraudulent activity, wherever and
whenever it occurs."
The stipulated final judgments and permanent injunctions, entered by
U.S. District Judge Charles P. Sifton of the Eastern District of New
York, 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 from using the T-Mobile trademark. If the
defendants violate the injunctions, the orders provide a mechanism for
enforcement by the courts and a minimum charge of an additional
$500,000 in damages to be paid to T-Mobile.
T-Mobile has previously been awarded more than $9 million in
judgments entered in other similar cases, and has several additional
lawsuits pending in federal courts across the country as part of its
concerted effort to protect consumers from prepaid phone trafficking.