Consumer Federation of California

Looking back at it now, Liz Walker regrets being kind to that stranger in her office.

The man, in his 20s, appeared in Walker’s cubicle-divided workspace, inside the Sacramento County Office of Education’s infant-development program, asking to use a phone. Walker pointed the young man to the landline on her desk, beside which perched her unremarkable cellphone.

While the program analyst chatted with a neighboring co-worker, the man made his call, hung up and thanked Walker for the favor. After he left, Walker noticed her Samsung had gone with him.

“I chased after him,” she told SN&R, but to no avail. “He was much faster than me.”

Walker still can’t believe the galling way it went down. “It was so brazen,” she laughed.

Yet surprisingly common.

An estimated 3.1 million Americans surrendered their smartphones to criminals last year, according to Consumer Reports, nearly doubling the 1.6 million thefts that occurred in 2012.

Today, 30-40 percent of thefts in major American cities involve the loss of a pocket-sized supercomputer, says the Federal Communications Commission.

What’s quickly become the most common property crime in the nation, if not the world, props up a black market and billion-dollar insurance industry alike. It also leads to frequently bloody confrontations.

Here in Sacramento, physical violence or a brandished gun featured in 68 percent of crimes in which a cellphone was stolen, according to an SN&R review of Sacramento Police Department daily-log data from the first six months of the year.

In total, 47 cellphone-related robberies were reported to police during that period. (Six additional reports in which a cellphone was taken from a person were classified as thefts.) Those figures are likely incomplete.

Stolen cellphones have risen as a portion of all robberies in the city, from 19 percent in 2011 to 27 percent last year. “It’s certainly a sought-out [item] in terms of robberies,” said police Sgt. Matt Young.

According to the logs, most cellphone robbers use guns, physical violence or good Samaritan ploys like the one Walker experienced.

That’s not including attempted muggings like the one that occurred the morning of March 21 at a light-rail station in north Sacramento near Kathleen Avenue and Academy Way. That’s where 20-year-old Paul K. Broadway accosted a man in a wheelchair and rifled through his pockets trying to pinch his cellphone. The victim was able to fend off Broadway, who was apprehended by responding officers.

Sacramento Superior Court online records show that Broadway pleaded no contest to one count of second-degree attempted robbery on April 24. He’s currently serving a yearlong sentence at the main jail downtown.

Most smartphone thieves are never arrested, while the ones who are are often young. Of the 13 cases in which someone was arrested for stealing a cellphone in Sacramento as of June 30, five featured juvenile perpetrators.

Other patterns emerge as well, with requests for help, online meetups and domestic violence also recurring.

Police responded to an additional four cellphone-related robberies this month, including two incidents in which the victims had arranged to sell their cellphones online, only to be rolled by individuals posing as buyers. In another case, a man was arrested for pistol-whipping his significant other and taking her cellphone. And on July 11, two armed men reportedly forced their way into a male victim’s residence and looted his phone and property, police logs state.

While it’s not unusual for cellphones to be just one of the items taken by bandits stripping people of cash, jewelry and even marijuana, it’s even more likely that they will be the only thing taken.

There’s a reason for that. Stealing a mobile device is the “easiest, quickest way to get your hands on several hundred bucks,” said Richard Holober, executive director of the Consumer Federation of California, a Sacramento-based consumer-advocacy group.

The FCC cites the high resale value of smartphones and the personal information they store as reasons they’re so attractive to robbers and identity thieves, who often turn to individual auction sites like Craigslist or eBay to unload the illicit wares.

Inside Sacramento’s smartphone black market

The man was a fiend for high-end smartphones.

It was obvious from the way he used dollar signs instead of S’s in his local Craigslist ad headline: “FA$T CA$H 4 CELL PHONE$!!”

Note the two exclamation marks. Guy meant business.

Reached by phone, the fast-talking bulk buyer explained he’d been dealing in cellphones for 12 years, dating back to an era when color screens and built-in cameras were still novel. He claimed “big accounts” that hooked him up with 60-70 phones a week, but also collected from churches and individuals who were hard-up for cash. “As long as they’re not cheap, prepaid phones,” he said. “I’m just not looking for crap.”

He also wasn’t looking for ill-gotten smartphones, he claimed. “I can’t sell anything hot.”

But he stopped short of needing to see receipts or other proof of ownership. If the phones weren’t locked or password protected, he looked forward to a long-term business relationship.

Elsewhere on the site, a stack of new and used cellphone screwdrivers and openers were priced at $12. Wiping or unlocking locked smartphones repeated as popular services on Craigslist, too, while others advertised new and used smartphones of varying quality and procurement.

“Tiffany’s” ad said she was selling a locked iPhone 5 for $30, but she voluntarily dropped that amount to $20 when reached at the phone number provided. She said she found the smartphone on the banks of the American River. “No one ever came for it, and I didn’t know what to do,” she said. “It’s only good for parts.”

Another ad on Craiglist’s Sacramento page plugged a Samsung Galaxy Note II smartphone for $330. The catch is that it was “blacklisted,” meaning it was reported lost or stolen to the provider. “It can only work overseas,” said a woman who answered to the name “Ron” and suggested Mexico or Puerto Rico as possible destinations where the expensive electronic might actually be useful.

She was also selling a Samsung Galaxy Note III and Samsung Galaxy Mega, but the buyer would have to come to a cellphone outlet in south Sacramento to check out those goods. It’s unclear how Ron came into possession of a blacklisted smartphone, but her sales offer seemed to fall into a murky legal area.

Sgt. Lisa R. Bowman, spokeswoman for the Sacramento County Sheriff’s Department, said providers are supposed to report all blacklisted phones to law enforcement, so that any recovered ones can be returned to their owners. But they’re not legally required to do so, and authorities can’t arrest someone for possessing a stolen phone if it hasn’t been reported stolen.

“We can only encourage potential buyers of these products to use common sense and thoroughly research the item … before a purchase which might lead them to fall victim to a scam,” Bowman said.

Other than that, what can be done? Not much. Yet.

Big Telecom profits off crime

A growing slew of “kill-switch” legislative fixes are popping up around the country—and meeting resistance from a powerful telecommunications industry that rakes in more than $38 billion selling smartphone-theft insurance and replacement mobile devices to victimized consumers, according to figures from the office of state Sen. Mark Leno.

Earlier this year, the Bay Area Democrat introduced a bill that would require all smartphones manufactured and sold in California after January 1, 2015, to be equipped with remote-deactivation software. Thus far, Big Telecom has fought Leno kicking and tweeting.

“They have a business model that [relies] on crime,” said Holober, whose consumer-advocacy group supports Senate Bill 962.

The push for California’s kill-switch legislation originated in the Bay Area because of how explosively common smartphone thefts became in that region. In Oakland, a whopping 75 percent of robberies involve the theft of a mobile device. In San Francisco, more than 65 percent of robberies do. Long Beach and Los Angeles are also saturated with smartphone robbers.

Sacramento’s stolen smartphone problems pale by comparison.

“Smartphone theft is one is one of the fastest-growing crimes in many cities across California, but it is also a preventable crime,” Leno said in a statement. “Once we ensure that nearly all smartphone owners have theft-deterrent technology installed and enabled on their phones, we will take away the financial incentive for thieves and end this crime of convenience.”

When Leno introduced the measure earlier this year in February, smartphone manufacturers and wireless carriers came out to oppose it. Holober said he wasn’t surprised. Companies like AT&T and Sprint rake in “several billion dollars a year in phone-theft insurance,” he said. “So this is a significant part of their business model.”

In other words, stick-up kids and mom-and-pop scammers may drive the smartphone black market, but telecoms profit from the crime the most.

Media outlets reported last year that several major carriers balked at a new smartphone-wiping software developed by Samsung with the New York-based Secure Our Smartphones initiative.

According to The Associated Press, San Francisco District Attorney George Gascón obtained emails between Samsung and multiple cellphone carriers that he said showed their reluctance originated from a feared drop in theft-insurance profits.

In recent months, the wireless industry has largely backed off from its recalcitrance, at least publicly, with many smartphone companies releasing their own versions of anti-theft security. While Apple, AT&T, BlackBerry, Microsoft and Verizon have all switched to neutral stances since the legislation was introduced, many of these same companies are represented by The Wireless Association, or CTIA, which opposes the bill.

CTIA vice president of external and state affairs Jamie Hastings dismissed S.B. 962 as “neither necessary nor workable” during an assembly subcommittee meeting last month.

Google, which is developing its own kill-switch function, is the biggest company shielded by CTIA’s opposition. The association is still waging a less visible battle to make the kill-switch demand voluntary, which critics say would allow companies to bury the functionality where most people won’t know how to enable it, or “opt in.”

That’s why S.B. 962’s requirement that kill-switch technology be the default setting—active unless the phone’s owner follows a prompt to disable it—is a central part of the measure, said Holober. “That’s what makes it meaningful.”

The Senate and two Assembly subcommittees have already approved S.B. 962, but a full floor vote next month looms. Gov. Jerry Brown would also need to sign the law for it to take effect.

It’s no foregone conclusion that it’ll survive such tests. The measure initially suffered a setback in April, when several of Leno’s fellow Senate Democrats voted against it, the San Francisco Chronicle reported.

While the mobile-communications industry has suffered “a black eye” by taking such a forceful stance against measures that could reduce theft and violence, Holober said it has reason to try. “This is an industry that pretty much owns the Legislature,” he said.

Meanwhile, the quickest solution might be a little thoughtfulness. According to a Lookout survey conducted by IDG Research, 44 percent of smartphone-theft victims “accidentally left their phone behind in a public setting where it was later snatched by a thief.” Comparatively, only 11 percent had their smartphones stolen out of their hands, pockets, purses or bags.

When it comes right down to it, memory might just be the stealthiest thief.

Tags: CFC, George Gascon, sb 962, Smartphones, telecom