Prepaid cell phones are a growing market. I have seen estimates of market share for prepaid phones vary from 16% to 50%. These prepaid phones serve a useful and practical function for those who are light users of cell phones (my wife has one) and those who have trouble establishing a normal contract with cellular carriers due to various reasons such as poor credit, budget limits, lack of fixed address, etc.

Prepaid cell phones by themselves are not a problem.

What is a problem is the ease that these phones can be used as anonymous prepaid cell phones.

What is the difference between prepaid cellphones and anonymous prepaid cell phones? There is not physical difference. When you buy a prepaid phone at 7-11, Walmart, etc. you just pay for them as with any other purchase. There is not registration, no ID check, etc. And the phone doesn’t work yet.


Then you have to register the phone with the provider, sometimes a subsidiary of one of the major 4 carriers, sometimes an independent like TracFone, which is actually the largest provider of prepaid services in the US. At that point the provider asks for you identity. But the transaction is done either over the phone or by Internet so it is perfectly easy to give a false identity. But what if you don’t have the time or aren’t creative enough to dream up a false name and address? TracFone is there for you! As the screenshot above shows, the ever thoughtful TracFone has a line on their registration page that says “If you wish to skip this step, please click here”.


OK so some people want anonymity. Tiger Woods for example. I understand. I am even a card carrying ACLU member. But did you ever Google “prepaid cellphone crime”? You get 88,000+ hits on this combination of topics. Just like on Law & Order, prepaid “throw away” phones are the communications media of choice for criminals.

Overseas, prepaid phones are the media for choice for terrorists too. Indeed, the 2004 Madrid train bombings were detonated by prepaid cell phones.

Other countries have banned anonymous prepaid phones by requiring registration of all users and equipment. Such countries include Japan, Greece, and Mexico.

Now strict registration of cell phones has its downside too. Studies have shown that communications is necessary for homeless individuals to get jobs and back on the road to recovery. Cell phones are also a safety issue and there are users with legitimate safety issues who might not be able to walk into a Verizon Office to offer normal documentation.

But rather than sweeping this issue under the carpet, why don’t we start a dialogue among the cellular industry, law enforcement agencies, and FCC to explore practical ways to control the use of the large number of anonymous prepaid phones.

Video on Prepaid Cell Phones

UPDATE

TracFone no longer uses the form shown that gives users the option to “skip” giving personal information. However, it is not clear if Tracfone requires real information or just accepts whatever input the user types in. If TracFone wishes to address this point we will gladly post their response in full without editorial comment.