What is the iScheme?
9News has discovered that some scammers are cruising around homeless shelters and plasma donation clinics. They drive anyone desperate for money to Apple Stores and instruct them to sign several iPhone contracts. Scammers convince these people that the contracts can be cancelled within a few days and that they won't have to worry about monthly fees.
As soon as the transactions are complete, scammers then pay them a couple hundred dollars for the handsets. The con men, in turn, walk away and sell the devices for full price. Because these contracts can't, in fact, be cancelled within a few days for free, the victims are responsible for the monthly fees that come with contracts.
19-year-old Denver woman Phoenix is one of the victims of this scam. "I thought it was amazing money. I had rent due the next day and I was looking to pay it," said Phoenix. She added that, thanks to the scam, she's now "in the hole about $6,000. They're targeting anybody that looks like they would be vulnerable."
Another victim, Jamal, told 9news he's now over $2,000 in debt due to signing multiple contracts for the handsets. "I just needed cash at the moment," said Jamal. "I didn't really understand what was happening." According to Jamal, scammers picked him up at a plasma donation clinic in Aurora, Colorado.
What is being done about it?
9News uncovered the identity of one of the people behind the scheme, Beverly Hills resident Benji Kermani. Kermani, who owns a company that sells unlocked iPhones in foreign countries, was caught on camera operating the scheme at an Apple Store in Cherry Creek. Jamal filed a police report on the matter, though Denver police will not investigate because the scheme is considered an "unfounded civil" issue.
Apple, AT&T, and Verizon refused to comment on the matter, with Apple saying it doesn't comment on "matters of security." Sprint attorney Dan Solomon, however, did respond to the inquiry. According to Solomon, once Sprint started selling the iPhone, it noticed "rampant credit 'mulling' all over the country." Credit mulling is the act of using someone else's identity in order to acquire something of value.
Solomon said Sprint is very active in curbing schemes like this. "There are many laws being broken by this activity," said Solomon. "Sprint has filed about 40 lawsuits all over the country to crack down on this behavior."
What can you do to protect yourself against this scam?
"Don't talk to strangers" is one piece of advice that is told to us when we are kids, yet it couldn't be more applicable. With a combination of common sense and longer thinking time, you should be able to easily sniff out a scam like this. It's easy to suspend your disbelief when you get an opportunity to receive money for what seems like a meaningless task, but make sure to sniff it out first.
For this particular scam, it's simple enough to avoid due to one glaring red flag: contracts. Carrier contracts are always associated with monthly fees, and it's incorrect to assume that you can simply cancel the contract and pay nothing. For example, while you can cancel a Verizon contract in the first 14 days without paying a dime, you have to return the handset. This scam requires victims to turn over the purchased handsets, thus making the return period a moot point.
In addition, with contracts come early termination fees. While you are more than welcome to cancel the contract at any point during its two-year life expectancy, you have to fork over quite a bit of money to do so. Using Verizon as an example, those who wish to cancel their contracts before the two years are up must pay $350 to do so. That's a lot of money for someone who is struggling as it is to make ends meet.
It's difficult to think about tomorrow when you're struggling with making it past today, but it's not worth giving up your gut reaction and slight suspension of disbelief. Even if you're living relatively comfortably, be just as aware about scams like this one. If your gut tells you something is off, it's probably right.
Plus, if you see anyone driving around places like homeless shelters and plasma donation clinics, they're probably not the most honest of characters to begin with.
[Image courtesy of IVY PHOTOS / Shutterstock.com]
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