Smartphone theft reaches pandemic proportions (and you are a target)

Smartphone theft reaches pandemic proportions (and you are a target)

Summary: The spread of smartphone theft is off the charts. Some US senators have a plan to solve it, but the carriers don't agree. Is the Senate plan a bad idea, or are carriers just trying to bilk their customers out of insurance fees? It's an ugly story no matter how you look at it.

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What's smaller than a slice of bread, worth hundreds of dollars, and carried by almost anyone? If you guessed "smartphone," you'd be right on the money. In fact, it's the relationship between money and smartphones that is causing the problem.

"Carriers are rejecting a technological solution so they can continue to shake down their customers for billions of dollars in (theft) insurance premiums." 
— San Francisco's District Attorney

As we all know, smartphones are small, portable, jewel-like, and quite expensive. They are extremely portable and easily resold. These characteristics make them ideal targets for criminals, and those who carry smartphones ideal targets for robbers.

iPhones, for example, have become a form of hard currency. As BusinessWeek reports, an iPhone bought here in the US for $815 (with tax) is worth about $1,130 in Italy. That's a $315 profit on a legitimate purchase. Using numbers from the BusinessWeek story, unlocked iPhone 5S devices cost about $700 on average in the US and can be resold for $971 (in France) to $1,196 (in Brazil).

Going back as far as 2009, smartphones have even contributed to the funding of terrorist organizations. In this four-year-old Department of Justice announcement, terrorist suspects were caught in an FBI sting trying to buy stolen smartphones that would eventually be laundered into purchases of "anti-aircraft missiles (FIM-92 Stingers) and conspiring to possess machine guns (approximately 10,000 Colt M4 Carbines)."

In another variant of criminal activity, the State of California Department of Justice Office of the Attorney General announced last March that they had filed criminal charges against a criminal ring trafficking in $4 million worth of smartphones. Their scheme was to send homeless and indigent people into carriers to buy smartphones at the subsidized rate (with no intent of paying the monthly fees), and then resell the devices for as much as ten times the cost in places like Hong Kong.

Our own David Morgenstern points out that Apple Stores are also a major target for smartphone theft. Last December, he documented a string of Apple Store robberies.

Consumer Reports estimates that 1.6 million smartphones were stolen in the United States in 2012. Given the incredible growth rate in smartphone sales from 2012 to 2013, we can expect that number to have been significantly higher in the last year.

While that statistic alone is disturbing, where things really begin to stand out is in the percentage of criminal activity overall that is related to smartphones and smartphone theft. According to the FCC, as reported by CNET, nearly one-in-three robberies involve smartphone theft. Half of all robberies in New York and San Francisco involve smartphone theft, and in Oakland, California, that number reaches 75 percent.

Reaching pandemic proportions

The difference between an epidemic and a pandemic is the spread of the disease. While an epidemic can impact a widespread section of a population, that population is generally contained within a regional area. If smartphone thefts were confined in the main to, say, New York City, it would be an epidemic. But since smartphone theft is now a national problem (and a worldwide problem), that pushes the problem into pandemic proportions.

Murder he wrote

And it's not just robbery. As the Huffington Post reports, smartphone thefts can lead to murder. The author, Gerry Smith, points to the case of Hwangbum Yang, a Korean-born immigrant who was shot in the Bronx by a for his iPhone. The alleged killer (the case is awaiting trial), one Dominick Davis, left Yang's wallet on the body, but later listed the phone for sale on Craigslist for $400.

The kill-switch plan

Law enforcement and government officials have taken notice of the problem and have a plan for a solution. Their solution is a smartphone kill-switch that they want to force the carriers to implement. The way it would work is that if your phone was stolen, you could immediately log into your carrier's service and permanently brick your phone, thereby eliminating its value on the resale market.

In June, this effort started as a "Secure Our Smartphones" initiative put forth by New York Attorney General Eric Schneiderman and San Francisco District Attorney George Gascón. The carriers, however, don't like this idea and in December nixed the plan, asserting that a central database of stolen smartphones might be a better approach.

The kill-switch solution escalated again on Thursday, when four Democratic US senators — Amy Klobuchar, Barbara Mikulski, Richard Blumenthal, and Mazie Hirono — proposed the Smartphone Theft Prevention Act. Here's the press release from Senator Klobuchar (who apparently is also very much in love with bold and italic formatting styles — this release wins the "Most Like Early PageMaker" award for press releases).

But is a kill-switch a good idea?

The carriers don't think so, claiming there's an increased potential for hacking. But San Francisco District Attorney George Gascón doesn't think that's the case. In fact, he claims, "Carriers are rejecting a technological solution so they can continue to shake down their customers for billions of dollars in (theft) insurance premiums." 

I did an analysis of the value of carrier protection programs last June, and determined that the value wasn't really there for consumers. Worse, carriers would often replace lost or stolen phones with inferior, used, and refurbished phones, substantially increasing their profits overall.

So there may be some merit in DA Gascón's claim. After all, when have the carriers really acted in the best interests of their customers over profits?

Even so, I can see two sides to the kill-switch idea. Clearly, if the ability to resell phones is stopped in some way, their theft value will plummet, effectively killing the reason for this pandemic crime. However, the idea that the hardware won't be hackable is unlikely, even if a kill-switch is implemented.

Second, I share some concern with the carriers over increased hackability if a back-door is embedded in each device. That said, we know that there are all sorts of management back doors embedded in the device, all the way down to the very weak firmware OS that runs under the smartphone OS of most phones.

I also have some concern that if smartphones can be killed remotely, which gives government a way to instantly shut off communications -- but one could counter that argument with the fact that governments can shut off communications at the hub and don't have to brick millions of smartphones to get the job done.

My one final concern is that the term "kill-switch" might prove sadly prophetic. If users are given the opportunity to brick their phones after they're stolen, then criminals will simply stop users from exercising that option using extreme prejudice. I'd hate to see more people like Hwangbum Yang lose their lives just because some scumbag wants to make some money off the resale of these pocket-sized nightmares.

What do you think? Is a kill-switch the solution against smartphone theft or is there a better idea? You are the folks who would know, so share your thoughts.

By the way, I'm doing more updates on Twitter and Facebook than ever before. Be sure to follow me on Twitter at @DavidGewirtz and on Facebook at Facebook.com/DavidGewirtz.

Topics: Mobility, Android, Apple, Government, Government US, AT&T, Verizon

About

David Gewirtz, Distinguished Lecturer at CBS Interactive, is an author, U.S. policy advisor, and computer scientist. He is featured in the History Channel special The President's Book of Secrets and is a member of the National Press Club.

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Talkback

42 comments
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  • Uhhhhh.... No

    I can easily see far too many ways this could be abused, hacked or leveraged (leased devices) as a personal threat vector.
    So no, I really don't think this is a good solution.
    Then again, the carriers haven't demonstrated anything earth shattering either.
    rhonin
    • Well we've had 6 months of apple's kill switch

      With ios 7.

      I was hoping this article would have some meat and salad about iphone thefts and the effect of ios7's findmydevice instead of just the generic white bread of 'phones get stolen'

      Ios 7 hasn't been jailbroken yet, so it'd be interesting to see what if any effect a kill switch is having? After all if stolen iphones cannot be activated anywhere in the world, yet the rate of theft increases, it'd be a sign it doesn't work.

      Carriers are kind of irrelivent in this - it has to be in the handset maker, after all a carrier just sells someone else's phone for use in their country. They already block it working in theor country if it is stolen, but a global activation system? Governments or oems would have to pay for that kind of infrastructure
      MarknWill
      • My bad

        Ios 7 is jailbroken now.

        Seems very confusing whether jailbreak gets you around the find my fevice lock. From what i've read it its an A7 phone / pad then jailbreaking doesn't get around the kill switch if it was turned on when stolen?
        MarknWill
    • Sometimes persons wearing tin foil hats have a valid reason to do so.

      I agree with the sentiments that rhonin posted above. (It is a rare occurrence that I agree with rhonin’s comments but politics make strange bedfellows, they say! Grin.)

      Regarding David’s conjecture: "I also have some concern that if smartphones can be killed remotely, that gives government a way to instantly shut off communications -- but one could counter that argument with the fact that governments can shut off communications at the hub and don't have to brick millions of smartphones to get the job done."

      David didn’t think this point thru - at least I hope he didn’t because by suppling a “blow off” reason which minimizes this point implies a more sinister motive.

      Why should the "Government" shut down the whole cellular network when it could selectively shut down only the phones it wishes (if it had access to a kill switch) - even if those phones were in ninety nine percent of the population's possession at the time?

      Think about it. I would wish that only “my side” had access to communication capability during times of national civil disorder.

      Of course, by extreme civil disorder, I’m referring to something similar to what occurred in the Middle East during the “Arab Spring” uprisings.

      Think something like that scenario could not happen in the US? Think again. That scenario was “THAT CLOSE” to occurring during the “Great Recession” coupled with “The One Percent” demonstrations that we witnessed not too long ago. If the auto bailouts had not occurred in a timely and successful manner, Michigan would have gone bankrupt and a few other boarding Mid Western States might have followed. The Great Recession would have continued and civil unrest would have escalated and even a possible civil war between the “Haves” and the “Have Nots” might have occurred.

      In such an environment, I would have to believe the Government (in order to restore “order”) would find a “kill switch” for selected cellular phones in possession of the demonstrators (and the press) a highly desirable capability.

      And, don’t forget, bricking a smartphone also disables it’s camera subsystem (and all other functions) A bricked smartphone provides no incriminating pictures to worry about after the fact. (Or, at least, a vast reduction for possible photographic documentation that could be uploaded to various social networks - such as Twitter and Facebook)

      Not surprisingly, I’m against a global smartphone kill switch option or requirement for future phones.

      And, although David didn’t state his position on the matter, IMO, it was implied that David would vote for such a global capability for smartphones.

      I’m surprised that a civil libertarian like David would entertain even the thought that this was a good idea.
      kenosha77a
  • Lethargic

    Stop & Frisk, better policing of Craigslist, active search
    mediabias
  • Never feel safe buying a used phone again.

    We already have a "Kill Switch" in the US with the ESN Blacklist for certain phones. It all seems great until you hear the stories of people buying used phones using them for months then the original owner reporting it as stolen just for grins.

    If you don't think it happens often you greatly underestimate people...
    Stromos
  • Kill switch by the feds is insane.

    If my government really needs to tell me what I can buy because of crime, bricking the thing is NOT the way to do it.

    What will is permanent ID and (if so equipped) GPS and location that can always be turned on, both of which CANNOT be turned off by the owner. And why aren't we dragging Verizon and AT&T execs into court because they just connected a stolen phone to their networks -- Earth to Luddite Feds -- unless it is connected, the phone is worthless.

    Yes, after the 2012 IRS, etc. use of our government against the opposition, your ID and location WILL be used against you, particularly in an election campaign, but if you turn on your phone to make a call, look something up, send or receive a tweet, it is anyway.

    And not a government mandate -- if somebody is stupid enough to buy a phone that can be used once it is stolen, they should be smart enough to give it up to a bad guy and get a replacement that can be traced.
    TomMariner
  • This is a tough one

    The Apple version of the kill switch has caused a huge uproar in the iPhone world. It would be really interesting to see if the thefts of iPhones have gone down at all. I do know that on eBay people are still buying bricked iPhones which tells me they are either using them for parts or have figured a way around the Find My Phone lock, but that apparently is not the case. So if dead iPhones are still a commodity then a stolen smartphone still has value for someone. I guess for parts. As for insurance on a phone I would say that it is a very marginal idea. Real insurance should replace the phone at no charge if it stolen, or at a small deductible. I have an older Droid which I like. If I lost it Verizon would probably charge me $100.00 for a replacement which would be refurbished since the phone is no longer made. I can buy the same phone in the secondary market for less. But of course there is no guarantee you are getting a decent product. Very complicated issue all around.
    Al Kamieniecki
  • Hackers

    The kill switch is a bad idea. Just imagine if someone hacking into a carriers systems and mass disabling all kill switch enabled smartphones
    CPPCrispy
    • Edit feature needed.

      I am commenting from my phone and accidentally pushed the submit button while trying to edit my above comment. This is why a edit feature is needed.
      CPPCrispy
  • So more people will die for their phone

    So the new crime will be, set up a hacking operation, then start killing people for their phones and take over the accounts before anyone has a chance to react.

    And if a body was found without a phone, do we really need police time spent trying to track down and shut off the phone?

    And if my phone is stolen, should I brick it immediately or leave it alone and hope that someone will be interested in tracking it?

    Seems like a typical elected-moron over-reaction to a subject they know nothing about.
    aep528
  • Or, you know, the police could just find and arrest

    the thieves and return the stolen property.
    baggins_z
    • Also, since the kill switch bricks your phone

      explain to me how this would eliminate the need for theft insurance? You'd still need to get your phone back and working. Or are you thinking that having a kill switch would suddenly make it so no one would ever want to steal the phone? Because another way to make it so no one would want to steal the phone would be knowing they were going to get caught.
      baggins_z
    • If they can find them

      But if GPS really is "always on", this should be an easy matter.
      John L. Ries
      • Read the article again

        These things are being stolen and shipped out Internationally. Many countries have corrupt police forces. aka India tops the list for example. Should the police track down the stolen phone, That is if they bother. They are just as likely to demand a bribe to let them keep the phone. or a protection racket. You wouldn't want anything to happen to that nice stolen smartphone you's have there. Whats Al Qada doing now? Use the phone a few times, then give it to some unsuspecting person to be targeted by US Drones.
        csumbler
        • I'm not surprised

          The question is, what do we do about it? It seems to me that requiring carriers to implement a kill switch system that they will end up administering (requiring them to retain ultimate control over whether the device remains functional) isn't it.
          John L. Ries
  • I'm opposed

    1. I see it as an unnecessary barrier to entry. It should be available for those who want to pay for it, but we have too little competition in the mobile sector, not too much.

    2. It potentially reduces the control people have over their own devices. I've stated ad nauseum that efforts by vendors to retain even partial control over the hardware after it's sold are flat-out wrong and should be illegal; I'm therefore required for consistency's sake to oppose this effort also.

    3. It's potentially another way to hack into the device.

    4. Prior restraint should be a last resort, and I don't think stolen cell phones are an important enough reason to impose it.

    The technology is already available to enable the owners of mobile devices to lock their devices, but too few people avail themselves of it (myself included); make those capabilities mandatory if Congress really thinks it necessary. Vendors can and do offer services to allow devices to be tracked, should that be the desire of the owner of the device; let those who want them go there. I do think the bill is being offered in good faith, and I don't think the feds want it to make it easier to suppress political dissent, but it's nevertheless the case that that it's an unnecessary mandate and I know of no reasons good enough to justify imposing it (theft prevention isn't good enough).
    John L. Ries
    • It's not just the Feds that are backing this proposal.

      Various Police Associations have also come out for adoption of this feature. Having a bricked phone prevents incriminating photographic evidence from occuring during a police action.

      BTW, my father was a recipient of the Medal of Valor for his actions as a Detroit Police Officer. My brother-in-law is a very respected police officer as well. I state that info in order to lend credence to the following statement that I have the upmost respect for those that serve in this type of official capacity and I also have a better than average knowledge base regarding the types of encounters local law officers may encounter.

      Still, I think we have all seen occasions where local police officers at a particular location have forbidden use of various recording devices during a police situation.

      Oh, there are legit reasons I could think of for supporting a local Police capability to brick a particular cell phone or to brick a specific geographical area - many, in fact.

      But the potential abuses of this capability FAR outweigh the benefits IMO.
      kenosha77a
  • Tis would not really solve the issue

    'Bricking' a phone or otherwise having any form of remote data kill/wipe switch does not solve several of the issues...

    1. Remote Data kill/wipe switches do not prevent the problem of the theft of the phone in the first place

    2. Remote data kill/wipe switches can be easily circumvented long enough to get the data off. The thief merely need immediately throw the phone into a container that blocks signals, say a lead box, then take it to a location that also blocks or does not receive signals for hacking purposes to steal data.

    3. Bricking a phone even if successful and cannot be reversed still does not prevent thieves from making a profit, merely makes it less convenient. They can still disassemble the phone for parts, such as screens cases, batteries, etc...

    4. Bricking a phone I imagine could also be reverse hacked. Though this is admittedly conjecture on my part. Also, if the bricking is done by way of a one time signal, then I can see the same preventative measures used against data wipes to work on bricking.
    pcheintz72
  • iPhone already has a kill switch.

    Well, the iPhone already has a kill switch. Not by the carrier, but by Apple themselves. And to make matters worse for thieves, the iPhone still needs the original owner's ID and password to return the device to normal use.

    The only real workaround a potential thief has to resell an iPhone is to jailbreak it. Although that being said, I don't think jailbreaking an iPhone is difficult.
    CobraA1