For less than $15, you can buy a cell phone loaded with minutes. You can buy more as you go whenever those minutes run out. Best of all, you aren’t locked into a long-term contract.

But in South Florida, New York, California, Georgia, Texas and elsewhere, traffickers have figured out they can produce big profits by purchasing thousands of these low-cost phones and tweaking the software so that calls can be made on any cell network. The altered phones are soon after sold all by the world — costing the phone companies tens of millions of dollars.

Some traffickers employ dozens of folks full-time as “runners” to buy the phones at retail stores so they can later be hacked into and resold. The problem for the phone companies is that they often sell the phones at a loss, instead making their money when customers have to buy additional minutes from them — a guaranteed profit once the

phone is sold. But the phone companies have no guarantee that customers will buy minutes from them after the phones are hacked or shipped to a far-off country.

It’s technically not illegal to unlock the software on your personal cell phone — but the companies are hoping to put a stop to traffickers that they say are siphoning away profits. Led by Miami-based TracFone Wireless Inc., makers of the low-cost prepaid cell phones are suing traffickers in federal courts around the country. One such lawsuit resulted in a criminal conviction in Houston when a man disobeyed a court order by refusing to stop selling the phones.

“There is a lot of profit in it,” said James Baldinger, a West Palm Beach attorney with the Carlton Fields firm who represents TracFone. “Even as we continue to shut society down, we do find there are humans still engaged in it….

Original post by Top Tech News