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AT&T Blocks Four Firms from Reselling PrePay Handsets

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AT&T says that it has obtained judgments and permanent injunctions against defendants in four more federal lawsuits filed as part of the company's ongoing efforts to combat the unauthorized bulk purchase and resale of its prepaid mobile phones, SIM cards, and accessories.

To date, AT&T has filed 14 lawsuits against companies and individuals in Texas, Florida, California, and New York in an effort to stop this activity. So far, the lawsuits have resulted in a total of 15 permanent injunctions and final judgments totaling $51 million in damages. AT&T says that it expects to file additional lawsuits as it continues to aggressively investigate and combat the issue.

"We believe this is wrong, it's illegal, and it's bad for consumers," said Judy Cavalieri, vice president of marketing and head of AT&T's prepaid phone products. "We continue to investigate and will take aggressive action against those we find are involved."

In order to make prepaid phone service affordable for customers, AT&T subsidizes the cost of certain GoPhone prepaid handset models, and recoups the subsidy through the sale of airtime. "Prepaid handsets provide a viable, affordable option for customers who choose not to purchase a postpaid plan," Cavalieri said. "We're able to offer these GoPhone handsets at such great discounts only if they're used as intended on our network."

Among judgments AT&T has recently obtained:

  • On May 27, the U.S. District Court for the Eastern District of New York entered a consent judgment and permanent injunction against IA Communications, Inc. of Westbury, N.Y.; and DK Wireless Inc., d/b/a Wireless Touch and Talk 2 Me, of Baldwin, N.Y.
  • On June 15, the U.S. District Court for the Central District of California entered a stipulated final judgment and permanent injunction against Mohamad Farhat of Coachella, Calif. and his company, Delta Games, Inc. of Montebello, Calif.
  • Also on June 15, the U.S. District Court for the Southern District of Florida in Miami entered a stipulated final judgment and permanent injunction against defendants Ibrahim El-Zaatari and Tropical Export, Inc., both of Miami.
  • On June 25, the U.S. District Court for the Central District of California entered a stipulated final judgment and permanent injunction against California Products International, Inc. of Downey, Calif.

In all of the above final judgments, the Court found the defendants' conduct violated numerous state and federal laws, and awarded a judgment in the amounts of $3 or $5 million in damages.

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