CRTC's unlocked phone rule has sparked a crime spree, Bell and Rogers say

Bell and Rogers say new rules mandating all Canadian wireless carriers sell unlocked phones have triggered a rise in phone thefts.

"There have been multiple instances of armed robberies at our stores targeting unlocked, new devices," Bell said in a submission to the CRTC. The broadcast regulator had requested information from carriers to assess how its new rules are working out.

To help spur competition, on Dec. 1, the CRTC mandated that all carriers unlock phones for free and sell only unlocked phones going forward.

Previously, telcos sold customers phones locked to their networks and charged a fee — generally $50 — to unlock them so people could switch providers.

In the six months since the new rules took effect, Rogers said that it has seen a 100 per cent increase in the volume of "missing devices" that were supposed to be shipped directly to customers.

"We believe this trend is attributable to the availability of unlocked devices," which are "more desirable to fraudsters and thieves," Rogers said in its CRTC submission.

Rogers made no mention of in-store robberies. Both Rogers and Bell declined to offer more information about the thefts including actual numbers and details regarding any police investigations.

Consumer advocate John Lawford lobbied for the CRTC regulations, and says he's confident Bell and Rogers's theft reports won't prompt the regulator to reconsider its ruling on providing customers with unlocked phones. 

"There's lots of devices that are sold in the world that are not somehow disabled or copy-protected or whatever," said Lawford, executive director of the Public Interest Advocacy Centre in Ottawa.

"They just have to put [phones] in cages and take precautions."

Bell said it's now taking precautions by locking phones until they are activated for customers.

"We hope to significantly reduce any incentive for phone theft and protect our employees from potential robberies," spokesperson Marc Choma said in an email. 

Before creating the unlocking rules, the CRTC held hearings where it asked telcos for their input.

Bell, Rogers and Telus all advised against changing the status quo. Their testimony included the argument that unlocked phones attract thieves.

Telus declined to comment on whether it has seen a similar rise in thefts.

Freedom Mobile supported unlocked phones in the 2017 CRTC hearing. It downplayed theft concerns at the time, arguing that fraudsters can still unlock a phone by taking it to an independent dealer that offers the service. 

Freedom, which is owned by Shaw, also declined to comment for this story.

Thieves coming from the U.S.?

Bell suggested the recent wave of phone thefts could be the result of a U.S. crackdown.

"It appears that illegal activity may have shifted from the U.S. to Canada as some [U.S.] carriers have begun to lock devices," the telco said in its submission.

Bell declined to comment further and explain how it reached that conclusion. It could be referring to Verizon, which is the only major U.S. carrier that sells most of its phones unlocked.

The company is restricted from locking phones due to a stipulation in a past deal awarding it more wireless spectrum.

However, in February, Verizon announced it was locking phones until they were activated for customers, and would soon go one step further by keeping customers' phones locked for "a brief period" — all to combat theft.

At the time, the carrier said armed robberies had spiked by more than 200 per cent compared to the previous year.

"Just this weekend, four armed, masked men, stormed into one of our locations and held employees at gunpoint as they loaded phones from our inventory into a truck," said Tami Erwin, Verizon's executive vice-president of operations, in a statement in February.

"We need to protect our employees from criminals with guns."

Erwin also said the new measures would help prevent fraudsters from buying phones using stolen identities.  

Critics questioned the company's motives, suggesting it may want to temporarily lock customers' phones for competitive reasons.

Verizon declined to comment further on the issue, and appears to have yet to implement that part of the plan. 

Free phone unlocking for all?

The CRTC required that Bell, Rogers and other carriers submit information about their experiences with the new rules in response to a complaint from the Public Interest Advocacy Centre.

Shortly after free unlocking came into effect, the consumer group said it received complaints that Bell was refusing to unlock phones for people who had a second-hand Bell-locked phone but weren't a Bell customer.

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PIAC's Lawford asked the CRTC to clarify that carriers must unlock all phones from their network for free, regardless of whether the person asking has ever been a customer.

By February, Bell changed its policy to include non-customers.

Lawford is also confident telcos that say they're experiencing a spike in thefts will figure things out.

"It's up to the carriers to deal with it."