Whoa there! Watch out for cell phone ‘credit muling’

Scammers have found yet another way to exploit people who need money fast, including cash-strapped college students: Pay them to open wireless contracts that include new smart phones, tablets and other mobile devices. The scammers target people to act as “credit mules.” That’s when a scammer uses someone else's identity, personal information and credit to get something of value. In this case, it’s a wireless device.

Here’s how it works: A scammer — also known as a “recruiter” — asks the targets — also known as mules — to buy a number of phones under separate contracts. The recruiter pays the mules and reminds them to cancel the contracts within the allotted time — typically 15 to 30 days. The recruiter then takes the phones, unlocks them, and sells them for profit. Stay with me here: A lock is a software code that the manufacturer puts on the phone as required by the carrier that sells the device. The lock ensures that the phone can be used only with that carrier’s network until a different code is used to unlock the device. A single unlocked phone with no contract can be sold on the street in the U.S. for hundreds of dollars — and overseas, for thousands.

But when the mules try to cancel the contracts, they realize they’ve been duped. Regardless of what the recruiters told them, they can’t cancel the contracts without returning the phones. So the victims are not only on the hook to pay for the phones, but they also have to pay the monthly service fees for the length of the contracts. If they can’t pay, the accounts go to collection and their credit ratings suffer. Negative credit can affect their ability to get credit, insurance, a job, and even a place to live.

If you’ve been approached by someone offering you cash to sign a wireless contract — or already victimized by a “recruiter,” the FTC wants to hear about it. Your complaints help us stop rip-off artists, scammers, and fraudsters.

Leave a Comment

Commenting Policy

Este es un blog moderado; revisamos todos los comentarios antes de publicarlos. Esperamos que los participantes se traten respetuosamente entre sí y que traten con respeto a los demás bloggers. No publicaremos los comentarios que no cumplan con nuestra política de comentarios. Si un comentario incluye un enlace a un sitio comercial, quitaremos el enlace y publicaremos el comentario. Sólo editaremos los comentarios para quitar los enlaces comerciales.

No publicaremos:

  • spam ni cometarios no relacionados con el tema del blog
  • comentarios que contengan lenguaje vulgar, ataques personales o términos ofensivos dirigidos contra grupos específicos
  • ofrecimientos de venta o promociones
  • comentarios que contengan información que sea obviamente engañosa o falsa
  • comentarios que contengan información personal, como por ejemplo, domicilios privados

Los comentarios enviados a este blog se convierten en material de dominio público. Para proteger su privacidad y la de las demás personas, por favor no incluya información personal. No use este blog para reportar el fraude. Si desea puede presentar una queja. Si tiene preguntas sobre la política aplicable a los comentarios, por favor contáctenos.

Read Our Privacy Act Statement

It is your choice whether to submit a comment. If you do, you must create a
user name, or we will not post your comment. The Federal Trade Commission Act
authorizes this information collection for purposes of managing online
comments. Comments and user names are part of the Federal Trade Commission’s
(FTC) public records system, and user names also are part of the FTC’s computer
user records system. We may routinely use these records as described in the
FTC’s Privacy Act system notices. For more information on how the FTC handles
information that we collect, please read our privacy policy.