Fast cash: There are 650 ecoATM kiosks nationwide, including two machines in Franklin Mills. The automated purchasing machine scans a device, makes an offer for it and then disburses cash to the seller. PHOTO COURTESY OF ECOATM
City Council is considering outlawing machines that dispense dollars in exchange for small electronics like smartphones and iPods as one way of curbing skyrocketing phone thefts.
If the measure by Councilwoman at-large Blondell Reynolds Brown and Councilman Curtis Jones succeeds, Philadelphia won’t be the first city to prohibit machines like the two ecoATMs in the Far Northeast’s Franklin Mills.
In mid-September, Baltimore’s City Council members passed their own ban on ecoATMs, claiming the electronics-recycling machines or any like them provide easy money for thieves who swipe cell phones, and Maryland state legislators are considering drafting a statewide ban, Baltimore TV station WMAR reported on Sept. 16. The Baltimore Sun last month reported Riverside, Calif., also has banned the machines.
An automated purchasing machine scans a device, makes an offer for it and then disburses cash to the seller.
A public hearing on the Philadelphia measure, Bill №130693, will be conducted at 2 p.m. on Thursday, Oct. 24, in City Hall’s Room 400.
Jones and Reynolds Brown’s ordinance is not exactly modeled after Baltimore’s measure, said the councilwoman’s chief of staff, David Forde. “There are different nuances,” he stated in an Oct. 18 email to the Northeast Times.
“The councilwoman read an article put out by AAA that noted Philadelphia as the №1 location for stolen smartphones in the United States,” Forde stated. “She then asked her staff to investigate ways in which we could help stem the problem. One suggestion was to limit the opportunity to sell stolen phones. The bill to ban these types of machines in Philadelphia was then proposed.”
Police have been warning residents to not use their high-priced, high-tech toys in public because they run the risk of losing them to robbers. And, in the past year, there has been a rash of smartphone robberies.
Capt. Frank Palumbo, commander of the 2nd Police District, said small electronics represent easy — and big — scores for criminals. He said a robber who holds up someone on a city street takes a chance he will get only a few dollars. Taking a smartphone guarantees a bigger return.
Being able to get paid for a swiped phone without any human interaction makes that crime even more attractive, police said.
Ryan Kuder, a spokesman for San Diego-based ecoATM, claimed, however, that his company actually is in good position to deter smartphone thefts because an employee monitors each transaction and because the company keeps records of who sells what to its machines and shares that information with law enforcement.
RISING THEFTS
Smartphone and electronics thefts have become a real problem, especially around schools. Although Philly leads the nation in smartphone robberies, the problem is coast-to-coast.
The Associated Press reported earlier this year that 1.6 million smartphones were stolen in 2012 and that one out of three robberies nationwide involves smartphones. New York Attorney General Eric Schneiderman told the AP that New York state last year experienced a 40 percent spike in cell phone thefts. He added that stolen cell phones nationwide cost consumers more than $30 billion last year.
Kuder stated his company’s machines aren’t likely to be used by robbers who want to exchange stolen phones for ready cash.
“A person on the ecoATM team approves every transaction at every ecoATM to combat fraudulent sales,” Kuder said in an email to the Northeast Times. “We check for valid ID, make sure the person standing in front of the kiosk is who they say they are, take multiple photographs of the seller, scan the seller’s ID and collect their thumbprints. We fully comply with all relevant laws and regulations wherever we operate.”
Kuder said the company exceeds legal requirements by holding all devices for 30 days and by collecting and reporting more detailed information than the law requires.
“With all these security features, thieves tend to avoid ecoATM,” Kuder continued.
The company has recycled more than a million devices in its 650 ecoATM kiosks nationwide, he said, and only a very small percentage of the phones the company collects are reported stolen, Kuder stated.
“If a thief does try to slip in a stolen phone, we cooperate fully with local police,” he added. “We also return the phone to the victim, free of charge.”
The company has had its two machines in Franklin Mills since August 2012, Kuder said. The Riverside, Calif., and Baltimore bans on the company’s machines had no practical impact on cell phone thefts in those cities, Kuder stated, because ecoATM had no kiosks in either city. Riverside and Baltimore are the only towns that have banned the company’s machines, he said.
Even if Philadelphia does outlaw automated purchasing machines, that doesn’t mean they won’t be available in the suburbs.
Forde said Reynolds Brown currently is focusing on getting City Council to pass legislation banning automated purchasing machines.
“If successful,” Forde wrote in an email to the Northeast Times, “approaching legislators on the state level would be a potential next step.”
Chances for passage look good.
“We have yet to receive any indications from her colleagues that they will not be supportive,” Forde wrote.
Forde added that the councilwoman’s office has heard from ecoATM representatives, and he believes they and the councilwoman will speak before Thursday afternoon’s hearing.
Kuder said David Mersten, ecoATM’s chief legal officer; Drew Spaventa, director of market development and compliance; and Max Santiago, the company’s director of law-enforcement relations, plan on testifying.
Forde said representatives of the Philadelphia Police Department and the University of Pennsylvania also are expected to testify. Penn told the councilwoman’s office that stolen mobile phones is an issue for the university’s students. ••
How automated purchasing works
To sell a smartphone, for example, at an ecoATM, the seller must:
• Place the phone in the machine’s test station so the machine can examine the device and search for the highest price the company can find in the worldwide market;
• Be more than 18 years old;
• Provide valid identification that will be examined for holograms, watermarks and authentification used in all 50 states;
• Provide a valid thumbprint.
Customers who agree to sell their devices receive cash for them. Machines are emptied weekly.
EcoATM is a subsidiary of Outerwall Inc., the same company that operates CoinStar coin-counting machines and Redbox DVD rental machines in area supermarkets.
Sources: ecoATM, Outerwall Inc.
