Nightly News   |  May 26, 2013

Cash-for-phone ATMs may be fueling crime

A special ATM that dispenses cash for old cell phones may be encouraging criminals to steal mobile devices, NBC’s Jeff Rosen reports.

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>>> cell phones . they're being stoenl at an alarming rate, but now some police say new automated kiosks where can you trade in your used cell phone and get instant cash are making it easier than ever for criminals to profit off your stolen phone. here's nbc 's national investigative correspondent jeff rossen .

>> reporter: they strike without warning. thieves snatching cell phones right out of your hands. some victims even getting beaten up.

>> hi, i can help you swipe your device.

>> reporter: now a top cop says these machines are fueling the violence.

>> that's the motivator for the criminal element.

>> reporter: they're called ecoatms, kriosks that resiblg yo recycle your used cell phone . here's how they work. you put your phone in a bin. the machine scans it for market value and then gives you cash right on the spot. but critics say these machines are driving thieves to steal more phones for a quick payout. washington, d.c. police chief kathy linear.

>> i can knock you down and steal your phone, find the nearest atm and get up to $300 cash.

>> cell phones have turned up from georgia to texas to california. the company says it has a system to keep criminals away. first scanning the person's driver's license, and then taking a foe to have of them.

>> we have a team of people who verify in real time that the person standing in front of the machine is the person who's placed in the license.

>> what happens if the person in front of the machine is not same person as the license.

>> we denied the transaction.

>> we found that's not always true. we sent these two producers who obviously look nothing alike to ecoatms in two new jersey malls. we had this producer use the other one's i.d. to cash in a phone. it's clearly not her, yet the machine still takes the phone and spits out the money.

>> don't forget your cash.

>> reporter: same result at another eco atm . remember, the company makes money off the phones. we shared our findings with them.

>> i want to show you a picture. does this look like the same woman to you.

>> no, it does not look like the same woman.

>> this went went up to two of your machines.

>> it would appear we missed that one.

>> twice.

>> we look at these transaction and learn from each transaction that we do.

>> if we found this in one day who's to say this is not happening at a lot of different kiosks? every day?

>> we work very, very hard to make sure it is not. he says out of every 10,000 phones bought they discover five are stolen and those are returned. but d.c. police say they are finding a lot more than that. tracking at least 200 stolen phones to these machines. eco atm says it also provides photos, fingerprints an phone serial numbers that have helped police make arrests.

>> we're collecting more information about these people selling phones than anyone else.

>> work after the fact, we appreciate that. but that doesn't help the person who just had their jaw broken for the phone.

>> reporter: because of our investigation, eco atm now says it is reviewing its systems and looking for ways to improve. jeff rossen , nbc news, new york.

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