A message from Ronan Dunne, executive vice president and group president of Verizon Wireless:
Unfortunately, it’s a harsh reality that bad actors are always looking for ways to engage in fraud and identity theft. With private customer information in-hand, they defraud banks, retailers, non-profits and more. Despite our continuous efforts to combat fraud and theft, our customers and our company are no exception. Fraud and identity theft impact our customers financially, forcing them to spend considerable time and effort cleaning up their credit and identity.
Verizon customers are hurt when the fraudsters order and steal phones — clearly with no intention of ever paying for them. The stolen phones are then sold on the black market in dozens of nations around the world.
Identity theft criminals target Verizon customers because we’re the only large U.S. communications provider that sells devices that are unlocked upon sale. It means after the device leaves our inventory, it will work on any compatible network.
We’re always working to stop these criminals who impact about 7,000 customers every month. As a result of this activity, these customers have to deal with the inconvenience and hassle of identity theft, and Verizon sustains financial losses. While we actively work with law enforcement to stop this growing trend, it’s time that we take a stand to protect our customers.
That’s why we are asking the FCC today to confirm that the “C-block rules” put in place in 2007 allow us to keep phones locked, after they’re purchased, for a short, 60 day fraud safety check period, after which the phones will unlock automatically.
We believe this temporary lock on new phones will protect our customers by limiting the incentive for identity theft. At the same time, a temporary lock will have virtually no impact on our legitimate customers’ ability to use their devices. Almost none of our customers switch to another carrier within the first 60 days. Even with this limited fraud safety check, Verizon will still have the most consumer friendly unlocking policy in the industry. All of our main competitors lock their customers’ new devices for a period of time and require that they are fully paid off before unlocking.
I know that some may question why we’re doing this and why now. Some may even suggest that it’s anti-competitive. The answer is that while we have already enhanced the physical security of our stores and inventory, we must also enhance the digital security of our devices for the benefit of our customers.
We strongly believe that only real customers, not fraudsters, should be able to take their phones and wireless devices and use them on all compatible wireless networks. We continue to support open, unlocked devices that can be used on other networks. We stand by that pledge and we’ll continue to fight fraud and theft on behalf of our customers.