The FCC is waiving a 2007 “handset unlocking” rule that regulators say helped fuel phone theft and fraud, allowing cybercriminals to exploit Verizon cell phone users for years.
The US Federal Communications Commission announced on Monday it was closing the long-standing loophole “to bring a more uniform approach," and benefit Verizon customers by preventing criminals from targeting the popular smartphone brand.
The nearly 20-year-old rule – which applied only to Verizon – required the communications giant to unlock handsets just 60 days after activation, which the FCC says is earlier than standard industry practice for all other mobile carriers.
Furthermore, the outdated rule was regularly exploited by both “sophisticated criminal networks and everyday lawbreakers,” leading to massive handset theft, fraud, and other criminal acts, the FCC said.
“By waiving a regulation that incentivized bad actors to target one particular carrier’s handsets for theft, we now have a uniform industry standard that can help stem the flow of handsets into the black market,” FCC chair Brendan Carr said in a statement about the change.
Common cybercriminal activity was said to include “transnational handset trafficking schemes as well as broader criminal enterprises, like drug running and human smuggling,” Carr said.
Verizon complained that the 60-day device-locking period was insufficient for the company to effectively detect fraud, resulting in its unlocked phones being consistently targeted by bad actors.
Too often, stolen Verizon phones were resold on the black market, “commanding premium prices on the dark web, particularly in countries like Russia, China, and Cuba,“ the FCC said.
According to the consumer watchdog agency, the 60-day unlocking requirement was extended for Verizon in 2021 when it first acquired Tracfone, the company’s prepaid, no-contract smartphone service.
The mobile carrier said it “saw a spike in fraud of approximately 55% after TracFone moved from its earlier policy of a one-year lock to Verizon’s 60-day lock.”
Verizon will now align with the industry standards set out in the CTIA Consumer Code for Wireless Service, a voluntary industry agreement established in 2013.
Under the CTIA Consumer Code’s 12 provisions, unlocking policies address response time, customer notice, and specific exceptions, including for deployed military personnel.
The CTIA states that, as per industry standard, most carriers voluntarily unlock eligible handsets once certain conditions are met, typically when the phone is paid off or after a set period following activation.
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