OT - Cell phone makers fight resales

Wanna make some extra money the good old American way?

Sounds like the companies are being one upped.

TMT


Cell phone makers fight resales By ANDREW WELSH-HUGGINS, Associated
Press Writer
Sun Sep 10


People moving state to state, armed with cash and tricks to avoid
scrutiny, are buying cheap prepaid mobile phones by the thousands with
plans to sell them in Latin America and Hong Kong.

Cell phone companies say the practice is costing them millions of
dollars, and some have hired private investigators to document what
they say is illegal tampering with their phones. Wal-Mart, Radio Shack
and other retailers are limiting how many phones they will sell at one
time.

The buying has raised concerns the phones might be used to aid
terrorism, though those in the trade say it's nothing but capitalism at
its best - no different than reselling stock for more than you paid.

The Federal Bureau of Investigation and Department of Homeland Security
issued nationwide bulletins earlier this year warning police to be on
the lookout for bulk purchases of cell phones. Authorities are worried
that profits from the trade could end up financing terrorism or that
the phones could be used as detonators in attacks.

The practice - at the center of court cases in Florida, Ohio and
Michigan - appears widespread and in no danger of subsiding soon.
Participants in the trade don't appear very bashful.

"Don't leave a phone behind. To make real money buy them all," urged an
e-mail by Larry Riedeman of Larry's Cell in Altamonte Springs, Fla.,
that was included in a lawsuit against that entity by TracFone Wireless
Inc. "Thousands a day if you can!"

Riedeman and other small companies are considered the middlemen in a
system that starts with buyers snapping up phones at retailers such as
Wal-Mart Stores Inc. and ends with resale of the phones overseas.

In Ohio, two men acknowledged last month to authorities that they had
delivered 600 TracFones to a middleman over three months.

Also in August, three Dallas men briefly charged in Michigan with
trafficking counterfeited goods told the FBI that several businesses in
Texas buy telephones "from hundreds of people like themselves,"
according to an FBI filing in that case. The phones are then sold to
middlemen in California, New York or Miami.

Another buyer, Bilal Mustafa, 22, of Minneapolis, told The Associated
Press he travels around the Midwest a week at a time in search of
phones. He and a buddy will buy four to six at once at small-town
department stores, as many as 250 a day.

Mustafa sells them to a cell phone business he wouldn't identify. He
says he's doing nothing illegal and scoffs at FBI concerns that the
practice could aid terrorists.

"If it did, I wouldn't do it," said Mustafa, a Palestinian immigrant
from the West Bank. "I'm not stupid."

Purchasing cell phones in bulk is not illegal and authorities haven't
had much luck trying to prosecute the buyers. Earlier this week, a
federal judge threw out the charges against the men in the Michigan
case, saying there wasn't enough evidence to take the case to trial.

The Michigan charges alleged that by removing the cell phones from
their original packaging, the men made it easier to repackage the
phones with counterfeit trademarks in violation of federal copyright
law.

The men arrested in Ohio in August face a low-level charge of giving
misleading information to police, including changing their story about
why they had so many cell phones when they were first stopped.

Terrorism charges were leveled in both cases but quickly dropped.

The middlemen indicate an apparently insatiable hunger for the phones,
with profits in some cases of 100 percent for a handset that retails
for as little as $20.

The phones are so cheap because TracFone and other providers of prepaid
cellular service sell them at a loss to create a market for their real
profit maker, selling customers more call time.

For example, a Nokia 1100 - one of the phones referenced in
TracFone's lawsuit against Larry's Cell - was being sold in stores
for about $20 a phone. However, it probably cost TracFone about $25 per
phone wholesale, said Paul Sagawa, an industry analyst with Sanford C.
Bernstein & Co. in New York.

The Dallas men arrested in Michigan said they had spent $20,000 on
phones within just a few days.

The Riedeman e-mails promise earnings of $10,000 a month for aggressive
buyers. Riedeman offered bonuses to such suppliers, from $120 to anyone
bringing in 400 phones a month to $2,000 for someone buying 2,000 a
month, according to court documents.

Mustafa wouldn't say how much he earns on each $20 phone but said it's
a reasonable profit.

"I don't think I'll make a million bucks," he said. "Just enough to
take care of my car, my gas, a hotel and make a little money."

Buyers - often young men - pay cash, frequently making purchases in
the middle of the night to avoid scrutiny and to skirt store sales
limits, according to affidavits and other filings in state and federal
court.

They make up stories about why they need the phones, move from cashier
to cashier or simply buy the limit from a store, wait awhile, then
return.

"I have many times used other shoppers to help me," said the Riedeman
e-mail. "You would be surprised how many folks will lend a helping
hand."

Riedeman could not be reached to comment. E-mail and phone messages
were not immediately returned. No lawyer for him is listed in federal
court documents. A phone for his brother, Clint, who is also named in
the lawsuit, rang unanswered.

After receiving the phones from the buyers, often in bulk shipments,
the middlemen deactivate a software lock on the devices so they can be
used on other cellular services. The phones are then repackaged and
shipped to their next destination, records show.

A lawsuit filed in January by Nokia Corp. accuses Pan Ocean
Communications of Pompano Beach, Fla., of buying $20 cell phones from
Wal-Mart, Sam's Club and Target Corp. stores, disabling their software,
then reselling them for $39 as legitimate Nokia handsets. The company
sold them to distributors, wholesalers, exporters and flea market booth
operators, the lawsuit said.

A judge ordered Pan Ocean and another company, Sol Wireless Group of
Miami, to stop reselling the phones. Messages seeking comment were left
with attorneys representing the businesses.

Destinations have changed over the years, from Singapore in the past to
Mexico today, said John Walls, a spokesman for CTIA, a cellular
industry trade association that opposes the practice.

"You're able to deliver a pretty good product that will operate on the
Mexican network, the black market can deliver a handsome profit on that
device, and Mexican consumers have the opportunity to save themselves a
few dollars," Walls said.

Lawsuits filed by TracFone and Nokia also name markets in Latin America
and Hong Kong, where resale prices are higher.

Since TracFones that haven't been tampered with can work only in the
United States, overseas buyers ought to know they aren't being sold
legitimately, said Jim Baldinger, a TracFone attorney in West Palm
Beach, Fla.

Lawyers for the men arrested in Michigan and Ohio say their clients
were conducting legal business and are being targeted only because they
are of Middle Eastern descent.

"All these individuals were doing was buying and reselling phones,"
said Detroit attorney Nabih Ayad. "There's nothing illegal about it.
They buy cell phones from one retailer and sell them to another
retailer who can sell them for more."

Retailers, wireless service providers and phone makers don't see it
that way. "Resale on the black market is never a good thing," said
Wendy Dominguez, a Radio Shack Corp. spokeswoman.

At West Broad Cellular near downtown Columbus, owner Abdul Salameh
sells prepaid phones starting at $50, far above the price charged by
rivals whom he suspects of scooping them up at places such as Wal-Mart.


Salameh, 26, says he's being undercut by the practice but isn't sure
how to combat it:

"If people are selling them for real cheap, we're getting destroyed."

___

On the Net:

TracFone: http://tracfone.com

Nokia: http://www.nokia.com/index.html

CTIA: http://www.ctia.org

I read almost the entire article and still fail to see any wrongdoing
on the part of these bulk buyers. Looks like some cell phone making
businesses are greedy beyond reason, as often happens, and cover
themselves with completely false terrorism "concerns".


i

Too_Many_Tools wrote:
> Wanna make some extra money the good old American way?
>
> Sounds like the companies are being one upped.
>
> TMT
>
>
> Cell phone makers fight resales By ANDREW WELSH-HUGGINS, Associated
> Press Writer
> Sun Sep 10
>

Simply another case of a greedy corporations doing whatever they can, to keep all the profits for
themselves.

I think I'd be more surprised, to find out Michael Jackson was a queer..


D~

"Too_Many_Tools" <too_many_tools@yahoo.com> wrote in message
news:1158002628.695742.309320@i42g2000cwa.googlegroups.com...
> Wanna make some extra money the good old American way?
>
> Sounds like the companies are being one upped.
>
> TMT
>
>

About a month ago, there was a news story about Homeland Security's "big
bust" of some guy who'd bought a couple of hundred pre-paid cell phones.

It seems that they automatically ass/u/me that any such large volume of cell
phones *absolutely must* be destined for terrorists' use.

On Mon, 11 Sep 2006 18:25:30 -0500, "RAM³"
<S31924.nospam@netscape.net> wrote:

>It seems that they automatically ass/u/me that any such large volume of cell
>phones *absolutely must* be destined for terrorists' use.
===========
To the corporations anyone or anything that cuts into their
revenue *IS* a terrorist. Even the banks complain about the
non-bank transfer of funds as this cuts out of their commissions
and currency exchange profits.

A terrorist is now anyone "they" say is a terrorist.

Strange how someones' [loss of] profit is involved in about
99.44% of these reported cases.


Unka George (George McDuffee)
......................................................................
The arbitrary rule of a just and enlightened prince is always bad.
His virtues are the most dangerous and the surest form of seduction:
they lull a people imperceptibly into the habit of loving, respecting,
and serving his successor, whoever that successor may be,
no matter how wicked or stupid.

Denis Diderot (1713-84), French philosopher.
Refutation of Helvétius (written 1773-76;
first published 1875; repr. in Selected Writings,
ed. by Lester G. Crocker, 1966).

In message <lhubg2tladbg4m8jf3qrq69hjnlpuggfa0@4ax.com> F. George
McDuffee <gmcduffee@mcduffee-associates.us> wrote:

>On Mon, 11 Sep 2006 18:25:30 -0500, "RAM³"
><S31924.nospam@netscape.net> wrote:
>
>>It seems that they automatically ass/u/me that any such large volume of cell
>>phones *absolutely must* be destined for terrorists' use.
>===========
>To the corporations anyone or anything that cuts into their
>revenue *IS* a terrorist. Even the banks complain about the
>non-bank transfer of funds as this cuts out of their commissions
>and currency exchange profits.
>
>A terrorist is now anyone "they" say is a terrorist.
>
>Strange how someones' [loss of] profit is involved in about
>99.44% of these reported cases.

Sure -- If you're making money, you go out of your way to not notice. If
you're breaking even, chances are you don't go out of your way to
notice.

It's only when you start losing money that you bring out the manpower to
figure out why, and find a way to stop it.

--
#define QUESTION ((bb) || !(bb))
-- Shakespeare

I also saw that HLS story...where the Government was claiming a
terrorist deterred success....and this seems to be the "rest of the
story".

So much for success....I guess they saved someone from a cheaper cell
phone.

TMT


RAM³ wrote:
> "Too_Many_Tools" <too_many_tools@yahoo.com> wrote in message
> news:1158002628.695742.309320@i42g2000cwa.googlegroups.com...
> > Wanna make some extra money the good old American way?
> >
> > Sounds like the companies are being one upped.
> >
> > TMT
> >
> >
>
> About a month ago, there was a news story about Homeland Security's "big
> bust" of some guy who'd bought a couple of hundred pre-paid cell phones.
>
> It seems that they automatically ass/u/me that any such large volume of cell
> phones *absolutely must* be destined for terrorists' use.

Yeah...that is what disturbed me...the playing of the "terror card" to
get the Feds to do their dirty work....on our tax dollar.

TMT

Ignoramus29948 wrote:
> I read almost the entire article and still fail to see any wrongdoing
> on the part of these bulk buyers. Looks like some cell phone making
> businesses are greedy beyond reason, as often happens, and cover
> themselves with completely false terrorism "concerns".
>
>
> i

For example, a Nokia 1100 - one of the phones referenced in
TracFone's lawsuit against Larry's Cell - was being sold in stores
for about $20 a phone. However, it probably cost TracFone about $25 per
phone wholesale, said Paul Sagawa, an industry analyst with Sanford C.
Bernstein & Co. in New York.


I think thats called "dumping" when done by a foreign country. :-)
...lew...

Per Ignoramus29948:
> Looks like some cell phone making
>businesses are greedy beyond reason, as often happens, and cover
>themselves with completely false terrorism "concerns".

But wouldn't they be paying out much more for roaming if bulk quantities of
phones whose business model is centered around, for instance, Toledo Ohio were
distributed in, say, Mexico City?

Seems like, in order to offer a certain price for a certain number of minutes
they'd have to build some assumptions about anticipated average use into the
price.... and to the extent that entrepreneurs do what they're doing, the phone
companies would have to up the price or take the devices off the market.
--
PeteCresswell

On Tue, 12 Sep 2006 12:01:50 -0400, (PeteCresswell) <x@y.Invalid> wrote:
> Per Ignoramus29948:
>> Looks like some cell phone making
>>businesses are greedy beyond reason, as often happens, and cover
>>themselves with completely false terrorism "concerns".
>
> But wouldn't they be paying out much more for roaming if bulk quantities of
> phones whose business model is centered around, for instance, Toledo Ohio were
> distributed in, say, Mexico City?
>
> Seems like, in order to offer a certain price for a certain number of minutes
> they'd have to build some assumptions about anticipated average use into the
> price.... and to the extent that entrepreneurs do what they're doing, the phone
> companies would have to up the price or take the devices off the market.

that would be an honest thing to do, instead of subverting civil
society and using FBI to solve business problems.

"RAM³" <S31924.nospam@netscape.net> wrote in
news:zhmNg.9645$875.9244@fe69.usenetserver.com:

> About a month ago, there was a news story about Homeland Security's
> "big bust" of some guy who'd bought a couple of hundred pre-paid cell
> phones.
>
> It seems that they automatically ass/u/me that any such large volume
> of cell phones *absolutely must* be destined for terrorists' use.
>
>
>

All this is nothing new. Government bureaucrats have been confiscating
private property long before 9/11 or "homeland security" bureaucrats had
their eyes on the corporate prizes....

Case in point.....

Someone called the North Charleston Police in N Charleston, SC, to warn
them that 4 men had 4 suitcases full of cash on an Amtrak train headed
for Florida. The cops swooped down on the 4 nicely dressed Mafiosi,
confiscated about half a million dollars in Federal Reserve Banknotes and
arrested everyone, for no reason whatsoever other than they MAY have been
going to Florida to buy drugs, which was fairly obvious.

The only problem is, as of yet, it's is NOT illegal to be in possession
of $480,000 in small bills on a train headed to Florida. What do you
charge them with, overweight luggage? The NC cops kept the cash and had
to release the prisoners because, I suppose, no judge was going to get a
big enough cut to stick his head out that far for the consiglieris to
chop off in a courtroom.

Reading this in the Charleston Newsless Courier, our local ad rag, I
called our cops and explained that, sometimes, I like to carry a few
extra bucks around to buy stuff, mostly computer toys, I like to buy. I
wanted the cops to tell me how much money was too much money! Obviously,
$480,000 in small bills was over some imaginary line, too much money for
mere citizens of America to possess without some IRS bureaucrat's
permission. Unable to tell me how much the limit was before they
arrested me for no reason, he referred me to his supervisor Lt. I just
couldn't get any cop to tell me where that line was....because there is
no line....It's not illegal to possess cash....YET!...but they're working
on that, too.

Hell, those guys on the train MIGHT have been going to Florida to BUY
TRACFONES!! How awful that is!!

George Orwell had the date wrong......

I don't think they gave the Dom his $480 grand back, either!

A black lady withdrew her life savings from a Charleston, SC, bank after
Hurricane Hugo blew away her home in '89...long before 9/11. She was
stopped and searched by the Florida Gestapo near Jacksonville. She was
like 70 years old. The cops found MONEY in a big suitcase in her trunk!
CONTRABAND! She had over $17,000 in CASH on her! How awful! Even after
she explained, nicely, to the cops that she had come from Charleston to
buy BUILDING MATERIALS TO REBUILD HER HOUSE, they were having none of
that bull**** story....They confiscated the Contraband Cash and put her
in the can overnight. AS she had no money left to buy plywood with, she
came home after they stole her money and released her. I don't think she
ever got her money back, either.......

When will enough be enough??

--
There's amazing intelligence in the Universe.
You can tell because none of them ever called Earth.

On Tue, 12 Sep 2006 16:05:12 GMT, Ignoramus5625
<ignoramus5625@NOSPAM.5625.invalid> wrote:

>On Tue, 12 Sep 2006 12:01:50 -0400, (PeteCresswell) <x@y.Invalid> wrote:
>> Per Ignoramus29948:
>>> Looks like some cell phone making
>>>businesses are greedy beyond reason, as often happens, and cover
>>>themselves with completely false terrorism "concerns".
>>
>> But wouldn't they be paying out much more for roaming if bulk quantities of
>> phones whose business model is centered around, for instance, Toledo Ohio were
>> distributed in, say, Mexico City?
>>
>> Seems like, in order to offer a certain price for a certain number of minutes
>> they'd have to build some assumptions about anticipated average use into the
>> price.... and to the extent that entrepreneurs do what they're doing, the phone
>> companies would have to up the price or take the devices off the market.
>
>that would be an honest thing to do, instead of subverting civil
>society and using FBI to solve business problems
================
Remember when Howard Hughes and the major entertainment companies
such as MGM decided to move into Las Vagas? The used the FBI and
the IRS to make the mob "an offer they couldn't refuse" for the
casinos.

This simply proves again the ancient wisdom that whatever a
government is allowed to do to anybody, they will shortly do to
everybody.



Unka George (George McDuffee)
......................................................................
The arbitrary rule of a just and enlightened prince is always bad.
His virtues are the most dangerous and the surest form of seduction:
they lull a people imperceptibly into the habit of loving, respecting,
and serving his successor, whoever that successor may be,
no matter how wicked or stupid.

Denis Diderot (1713-84), French philosopher.
Refutation of Helvétius (written 1773-76;
first published 1875; repr. in Selected Writings,
ed. by Lester G. Crocker, 1966).

Yeah...I noticed this little point also.

This story is a good lesson in what happens when you don't have a
"liberal" press watching those who we allow to "protect"
us....Republicans and Democrats alike are guilty of this and have to be
watched by the rest of us.

TMT

Lew Hartswick wrote:
> For example, a Nokia 1100 - one of the phones referenced in
> TracFone's lawsuit against Larry's Cell - was being sold in stores
> for about $20 a phone. However, it probably cost TracFone about $25 per
> phone wholesale, said Paul Sagawa, an industry analyst with Sanford C.
> Bernstein & Co. in New York.
>
>
> I think thats called "dumping" when done by a foreign country. :-)
> ...lew...

"This simply proves again the ancient wisdom that whatever a
government is allowed to do to anybody, they will shortly do to
everybody. "

EXCELLENT....this is going on my wall....above my guns.

TMT





F. George McDuffee wrote:
> On Tue, 12 Sep 2006 16:05:12 GMT, Ignoramus5625
> <ignoramus5625@NOSPAM.5625.invalid> wrote:
>
> >On Tue, 12 Sep 2006 12:01:50 -0400, (PeteCresswell) <x@y.Invalid> wrote:
> >> Per Ignoramus29948:
> >>> Looks like some cell phone making
> >>>businesses are greedy beyond reason, as often happens, and cover
> >>>themselves with completely false terrorism "concerns".
> >>
> >> But wouldn't they be paying out much more for roaming if bulk quantities of
> >> phones whose business model is centered around, for instance, Toledo Ohio were
> >> distributed in, say, Mexico City?
> >>
> >> Seems like, in order to offer a certain price for a certain number of minutes
> >> they'd have to build some assumptions about anticipated average use into the
> >> price.... and to the extent that entrepreneurs do what they're doing, the phone
> >> companies would have to up the price or take the devices off the market.
> >
> >that would be an honest thing to do, instead of subverting civil
> >society and using FBI to solve business problems
> ================
> Remember when Howard Hughes and the major entertainment companies
> such as MGM decided to move into Las Vagas? The used the FBI and
> the IRS to make the mob "an offer they couldn't refuse" for the
> casinos.
>
> This simply proves again the ancient wisdom that whatever a
> government is allowed to do to anybody, they will shortly do to
> everybody.
>
>
>
> Unka George (George McDuffee)
> .....................................................................
> The arbitrary rule of a just and enlightened prince is always bad.
> His virtues are the most dangerous and the surest form of seduction:
> they lull a people imperceptibly into the habit of loving, respecting,
> and serving his successor, whoever that successor may be,
> no matter how wicked or stupid.
>
> Denis Diderot (1713-84), French philosopher.
> Refutation of Helvétius (written 1773-76;
> first published 1875; repr. in Selected Writings,
> ed. by Lester G. Crocker, 1966).