Call 6 Investigators test machines sometimes offering cash for stolen phones

EcoATM moves to close security flaw

INDIANAPOLIS - A stolen cellphone that wound up in a new Indianapolis vending machine is prompting concerns by police, and the Call 6 Investigators found problems with some security features on those machines that are used to buy thousands of phones nationwide.

Vending machines have been installed at four Indianapolis malls over the past three months, operated by ecoATM, of San Diego. The company advertises that it recycles phones and offers cash on the spot while working with law enforcement and using several safeguards to avoid paying thieves who have just ripped off phones.

Despite those safeguards, stolen phones have been turning up in machines around the nation, including one in Indianapolis last month.

An iPhone 4 was stolen from a 26-year-old Indianapolis woman last month, and she told police she used a GPS application called "Find My iPhone" to pinpoint the location of the device. It led her right to the ecoATM inside Washington Square Mall, where a Marion County Sheriff's deputy filed a report indicating that he got the phone back for her.

"(The deputy) himself had to appear before a camera to verify his authenticity as a law enforcement officer," said Capt. Michael Hobbs with the Marion County Sheriff's Department.

He said live operators from ecoATM remotely opened the machine, allowing the deputy to reach in and recover the stolen phone. The operators also provided the deputy with a printout with details about the person who sold the stolen phone.

Hobbs said those details can be helpful in tracking down a phone thief.

"They're able to provide a identification of somebody who put that device into the machine, a thumb print and a photograph," Hobbs said.

ecoATM spells out on its website that it hands over a "transaction report" with that information any time a law enforcement officer asks for it. The machines have cameras that capture the image of the phone seller's face, and the company has live operators who make sure that the person's appearance matches that of the driver's license that is scanned by the machine.

But Hobbs said the Indianapolis theft, and others that have generated publicity elsewhere throughout the nation, raise concerns for officers tasked with catching phone thieves.

"It's not fool-proof in regard to, there is opportunity for someone to deposit a phone into the machine and get away with it," he said.

Similar concerns were express this month by police in the nation's capital, and police in Atlanta and Houston have reported finding stolen phones in ecoATM machines, sometimes moments after they are swiped from shoppers or others at the malls that contain those machines.

Hobbs said, "The questions that we have as investigators are, the identification that's provided to the machine, how do they authenticate that it's legitimate?"

On its website and at the machines themselves, ecoATM states that it only buys phones if a valid, government-issued photo identification is presented and verified by its staff. If a phony license or a photocopy that does not contain watermarks and embedded security features is used, Hobbs said it can leave police with no way of catching the crook. "Do they check for those features? What are they checking for? In regard to the thumb print, whose thumb is it?"

His questions, coupled with the concerns raised by police elsewhere, prompted the Call 6 Investigators to put the ecoATM security features to the test at the four local machines:

• Circle Centre Mall downtown
• Lafayette Square Mall on the west side
• Washington Square Mall on the east side
• Castleton Square Mall on the northeast side of Indianapolis

The machines displayed written and audio messages that stated only valid government-issued photo identifications would be accepted. The user is then prompted to place that ID card against a scanner. If the ID is accepted, the user is directed to place the phone inside a bay on the machine so that ecoATM personnel can evaluate what type of device it is.

The Call 6 Investigators ran a paper photocopy of a reporter's driver's license and placed it on the scanner on 10 different occasions at the various Indianapolis malls. On half of those occasions, the machine rejected the paper photocopy and ended the transaction. In five other attempts, the machine offered cash for various cellphones, including a Galaxy smart phone, relying only on the paper reproduction of a driver's license.

"I definitely have concerns about it," said Hobbs.

"Often, criminals pick the path of least resistance, and naturally any person would assume it's probably easiest to offload any type of property when you don't have a face-to-face, human-human interaction," he added.

A recent victim of phone theft, Dorinita Caesar of Indianapolis, spotted the ecoATM at Lafayette Square Mall on a shopping trip recently and she reacted, "Oh yeah, it definitely makes it easier for crooks."

While her phone was never located, she said phone thieves don't need another way to get cash after throwing a wrench in their victims' lives.

"I mean, it's like taking away all my identity. You got my numbers, you got a lot of stuff that I need that's missing. You're losing so much," Caesar said.

An ecoATM spokesman, Ryan Kuder, admitted the machines should not have accepted a paper copy of an identification card, as the Call 6 Investigators found.

"We've addressed what you've found," he said.

"Any time that we receive a report about something that could be improved on our machines, we go ahead and we try to figure out how best to make that happen. We are upgrading the technology that's used to scan and read the IDs that will prevent this from happening in the future," said Kuder, adding that the new technology would actually scan the magnetic bar codes on government-issued ID cards to ensure they are valid.

He said "a couple" of stolen phones end up in ecoATM devices each week, but said he could not provide a ballpark total nationwide number. He called that "a really small number," amounting to one report of a stolen phone for every 4,000 to 5,000 phones that are purchased by the machines.

The company tallies more than 300 machines in 21 states, with more being added.

He said the company is able to return more than 90 percent of the stolen phones that are discovered back to the rightful owners.

"Most people who lose their phones never see them again, so that's our first priority," he said.

"At the end of the day, we report all our transactions to law enforcement in the format that they prefer," said Kuder. "We take it seriously and we help to prosecute whenever we can."

Kuder said 60 percent of the phones that are purchased in ecoATM machines are sold and get a "second life" with insurance companies and other firms that buy used cellphones, usually through auction. He said the company usually loses money on older "low end" phones, but newer smart phones and iPhones have a strong secondary market.

He said the security features on the ecoATM, overall, should be a disincentive for phone thieves.

"We're always constantly learning and we're always trying to find out how to make ecoATMs more efficient and how to create a better experience for the people who come and trust us to recycle their phones, not just in a good environmental way but also in a safe way for the local communities," he said.

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