Kill Switches For Phones Would Save Consumers Billions

Insuring a top flight latest model phone against damage, loss and theft costs about £7 a month. If a stolen phone could be rendered useless remotely, then stealing mobile phones would happen less.

At the moment operators can switch off service to a lost or stolen mobile phone but that doesn’t stop the phones being shipped to another country and re-sold. That endures the continuing attraction of phone theft.

Only if the phone could be rendered inoperable could theft be discouraged. In the US legislation is up before the US Congress to mandate kill switches in phones.

But the US CTIA which represents the mobile operators opposes the legislation.

The reason given for the CTIA’s opposition is that hackers could get into the kill switch system and switch people’ phones off.

The real reason for the CTIA’s opposition is suspected to be that the operators make around $5 billion a year insuring people against damage, loss and theft of phones.

(BTW: The CTIA is the same group which lobbied successfully to make unlocking mobile phones a criminal offences in the USA).

Clearly, if a kill switch made phone theft unattractive to thieves, then fewer phones would get stolen and so fewer people would take out the anti-theft insurance.

Now the amount of money Americans spend replacing stolen phones is $580 million a year, says a Creighton University report.

And if consumers didn’t spend on theft protection insurance, because phone theft has become negligible, they would save another $2 billion a year on their phone insurance.

So the argument is: Is the loss of $2 billion in anti-theft insurance premiums paid to the operators more important than the $2 billion which consumers pay in insurance premiums?

(That’s assuming the insurers honour their obligation to cover the $580 million replacement charges for stolen phones).

It’s another of those American battles between vested interest and the people.

Guess who’ll win.

Tags: CTIA, kill switch, mobile operators, mobile phones, theft protection

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8 Comments

  1. david manners
    May 07, 2014 08:13

    Ha Ha, George, hopefully it’s an aberration. Winston Churchill said that America usually does the right thing in the end after trying everything else first.

  2. George Grimes
    May 07, 2014 04:20

    David,
    The CITA does “have a disproportionate effect on US legislators” and I think your description of the process is accurate. I believe that we in the U.S. have the worst government that money can buy!

  3. The Baron
    May 01, 2014 19:24

    Me too, Dr. B.

    The only time I use debit cards is when credit cards just aren’t accepted. The only examples I can think of just now being shopping in Costco, paying in to my ISA or wee girl’s CTF and paying my utilities online (buggered if I’m ever giving any utility a direct debit mandate!)

    Don’t do internet banking either as I don’t trust it – branch/phone banking only (the latter reqiring my customer id number and pin before a hacker could get anywhere, and there’s no “transfer to other accounts” option if they do).

    Of course, my wife does all the previously listed evils, so there’s the security flaw :)

  4. david manners
    May 01, 2014 12:00

    Well I think people change phones, on average, every three years Terry, and the manufacturer’s guarantee is usually a year and if a manufacturer built in early failure then the insurance for that kind of phone would go up disproportionately which might put people off buying it. So a manufacturer would have to be very confidence of the compellingness of his brand to do that.

  5. Terry
    May 01, 2014 11:24

    Be careful what you wish for. If mobile phones had a kill mechanism this could also be used by the manufacturers to make the phones expire after a certain time, mandating the purchase of a new one.

  6. david manners
    May 01, 2014 10:55

    Absolutely, The Baron, the CTIA’s arguments are bollox but they seem to have a disproportionate effect on US legislators’ actions. Could that be because the bollox arguments are backed up by brown paper envelopes for the legislators from the operators?

  7. Dr Bob
    May 01, 2014 09:41

    I agree with the last ilne The Baron.

    I must be a Luddite as I refuse to use debit cards, my banks have written instructions not to accept phone, internet banking or direct debits without a signature.

    I only use credit cards (1) as if there is an unauthorised payment I would pay off what I owe and after that it is the Bank’s problem and not mine

  8. The Baron
    May 01, 2014 09:28

    “The reason given for the CTIA’s opposition is that hackers could get into the kill switch system and switch people’ phones off.”

    Why not just give users the power to re-enable them then? Ship the phone with something similar to a microsoft product activation key that must be re-entered to reactivate the phone hardware. I can’t imagine adding something like 256 bits of factory-blown OTP/NVRAM etc. to embed (somehwere not trivially accessible, such as in or copackaged with the AP silicon) a unique key in each phone would add much to the cost (10-20 cents at most in mass production?)

    Also, if the CTIA reckon this is a serious threat (and I wouldn’t be surprised that such a system would be found to be full of weaknesses and an irresistable target, plus la change…), then doesn’t that speak volumes about its views on its members’ security capabilities, which in turn raises questions about things like the mobile-payment-is-the-future-of-money bandwagon du jour?

    The Baron

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