Why did the FCC change Verizon's phone unlock rule?

The FCC revised the rule to combat fraud, as Verizon reported hundreds of millions in annual losses due to unlocked phones being exploited by criminals.

How was Verizon's 60-day phone unlock policy exploited?

Criminal networks stole unlocked Verizon phones and resold them at high prices on the dark web, using them for illicit activities like smuggling.

What is the new phone unlocking policy for Verizon?

The FCC revised the rule, moving away from the 60-day unlock requirement for Verizon phones to address significant fraud concerns.

Home / Business and Economy / FCC Closes Phone Unlock Loophole Fuelling Fraud

FCC Closes Phone Unlock Loophole Fuelling Fraud

13 Jan

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Summary

FCC revised a rule requiring Verizon to unlock phones after 60 days.
Verizon reported hundreds of millions in annual losses due to fraud.
Unlocked phones were resold on dark web for criminal activities.

FCC Closes Phone Unlock Loophole Fuelling Fraud

The Federal Communications Commission has enacted a significant revision to a long-standing rule that previously required Verizon Communications to unlock its mobile phones 60 days post-activation. This adjustment comes after Verizon reported substantial annual losses, amounting to hundreds of millions of dollars, due to widespread fraud. The company argued that this early unlocking policy was being exploited by criminal networks.

Verizon stated that the unlocked handsets were frequently stolen and resold on the dark web, with particular destinations including Russia, China, and Cuba. This fraudulent activity has been a growing concern, with Verizon estimating the loss of over 784,000 devices to fraud in 2023 alone. The telecommunications giant sought this rule change last year to combat these escalating issues.

Previously, wireless carriers had agreed to unlock postpaid phones once fully paid and prepaid phones within one year of activation. Verizon was the sole major provider subject to the earlier 60-day unlocking requirement. FCC Chair Brendan Carr highlighted that these handset unlocking policies had been exploited for criminal acts, including drug running and human smuggling, underscoring the necessity of the revised rule.