AT&T, iPhone, and New York City: Fraud? Really?

As Rene mentioned earlier today, AT&T online is not selling iPhones to people in the New York City areas, but physical stores and Apple are selling them. AT&T's latest explanation for this is fraud.

I mentioned this story to the folks that run <a href="http://store.theiphoneblog.comThe iMore Store and they said that they have experienced 'waves' of fraud from the NYC area over the years, necessitating increased scrutiny on every order destined for the Big Apple. Much of their anti-fraud system was developed, in fact, in order to deal with fraudulent NYC area orders. AT&T Online refusing to sell anything to New Yorkers is an extreme and extremely bad solution, but it's not crazy to think that it's a bad solution to a real problem.

So either AT&T is lying about their incompetence in running a network or AT&T is telling the truth about their incompetence in running an online store. Or it's a third issue we haven't heard yet, one which we would like to think doesn't involve incompetence.

Dieter Bohn

Dieter Bohn is former editor-in-chief of Smartphone Experts, writing across iMore, Windows Phone Central, Android Central, and more. You can find him on Twitter (and everywhere else) @backlon.

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Reader comments

AT&T, iPhone, and New York City: Fraud? Really?

6 Comments

I think it's a temporary solution to a huge crime / fraud ring. Close up (online) shop until they can get things sorted.

Working for a company that provides services online I could see this as a viable reason. It will largely depending on what AT&T considers fraud, but if there are a large amount of people using stolen credit cards, or just doing a charge back on their credit card (which is fraud if they are claiming they did not receive the product/services). If that's the case then AT&T loses out on the phone, and in the case of charge backs they also lose $25.00. This goes with people being able to order the iPhone when on the family plan, cause they are 'known' to be good customers, and the rate of fraud among established customers is generally much much lower, then first time unknown customers.
Also you can purchase the iPhone at the many Apple Stores and AT&T stores that are all over NYC and it's borough, which the only draw back is you have to actually put on pants and go outside.

I can only imagine the fraud potential in NYC. A normally simple, via phone CFR on a line that's an iPhone required (additionally) an in-person visit and form signing. The extra steps were explained as being required due to iPhone fraud. And this was in the midwest.

Having worked for AT&T Wireless, I can tell you that this is a very likely explanation. Sad but true, New York is the source of many many fraudulent sales. A lot of them are Armenian or Russian owned electronics stores that will buy items with stolen/skimmed credit cards and then take delivery of the items, where they will be unlocked and sold on eBay or directly to overseas distributors. This happens with cameras, TVs, etc. It's also VERY common with cell phones. That "New York isn't ready for the iPhone" line that bloggers have been running amuck with was just something spouted out by a chat support rep, if it's even true at all.
This also isn't the first time that I've seen AT&T restrict online sales of iPhones because of fraud. As other people have said, you can still buy them - you just have to go to an actual retail location.
This is a non story, really.

They never should've allowed for online ordering - make the people physically go to the store. Having worked tech for AT&T for so long, it's like second nature to have the fraud vibe come across my radar.
Like Bob said, it's the -vic's, -sky's, Patels, Zhangs, Diazes, Gavins, Furillos and Johnsons. It seems each type of underworld element/organization/ family cross-section demographic has been getting in on the game since late '08.
Personally I think when there's been definite ID theft/fraud or credit fraud initiated and found out, the authorities should be alerted. Yes I know the courts are log jammed, but something needs to be done.