US agency revises Verizon phone unlocking rules after fraud issues

The US Federal Communications Commission (FCC) has changed its rule requiring Verizon to unlock its mobile phones 60 days after activation, citing significant fraud losses.

Verizon, the only major carrier subject to this early unlocking rule, said it lost nearly 785,000 devices to fraud in 2023, costing the company hundreds of millions of dollars.

The FCC said criminals have been exploiting the early unlocking policy to steal handsets and resell them, often on the dark web in countries such as Russia, China, and Cuba.

Wireless carriers generally unlock postpaid phones after they are fully paid off, and prepaid phones after one year, but Verizon’s policy was less strict due to a previous FCC mandate, requiring unlocking after only 60 days.

The agency said the policy change aims to close a loophole used by criminal networks for illicit activities, including drug trafficking and human smuggling.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Will losses fall or only switching

Verizon lost nearly 785,000 devices to fraud in 2023 1. FCC waiver replaces the 60-day auto-unlocking rule that lets phones work on other networks. It does not say which schemes it targets, such as purchase fraud or identity theft or device trafficking or retail theft 1.
Reuters said criminals use the 60-day rule to move handsets to Russia, China, and Cuba 1. Opponents argue AT&T and T-Mobile face similar theft without an automatic unlocking rule, so lock length may not drive cross-border trafficking 2.
The waiver moves Verizon to Cellular Telecommunications Industry Association (CTIA) voluntary rules 3. Postpaid unlocks after payment, prepaid after one year, and only on request. That slows switching for honest users while criminal rings that bypass carrier checks may see little change.

Security vendors gain as carriers tighten controls

Stricter unlocking signals more carrier spending on fraud tools. Expect International Mobile Equipment Identity (IMEI) intelligence, point-of-sale identity checks, and device authentication. Vendors that sell into carriers, Mobile Virtual Network Operators (MVNOs), and retail partners could see more orders.
The Stolen Phone Checker, run by CTIA using GSM Association (GSMA) Device Check data, lets buyers confirm status before purchase 4. Deeper use inside e-commerce sites, trade-in programs, and retail workflows opens a path for business-to-business-to-consumer (B2B2C) services in the used market.
Verizon’s hundreds of millions in losses across 785,000 devices work out to about $300 to $500 per unit 1. Similar rates across peers would lift U.S. spend on prevention tech.