Yes, but let’s just say you got a 1200 device and only made the first two payments… jump to another carrier and abandon the one with the finance plan. What’s the recourse for the carrier?
There's a reason carriers pull credit reports for post paid accounts and 'free' phone promos right?
Although, personally, I prefer to be on the prepaid side of the carrier. I'm not getting a promotional phone, and I'm not paying for it in my monthly rate, so if my phone works for more than two years, I'm saving money. And I don't really need to use secret handshake financing... I'd rather pay $17/month for my plan and pay for a phone when I need it.
That said, T-Mobile tried being the 'uncarrier' and charging fairer prices for service and financing phones directly, and it must not have worked as well as carrier norms because they reverted to secret handshake financing.
This has a loss rate of around 70-80% across the collections industry, which is an extremely strong disincentive to go this route since it's just highly inefficient. The high cost of the collections process is a deadweight loss upon all society.
There is no credit check with T-Mobile. In fact, even if you have bad credit, and you have had service with them for a year, you can get a phone on contract.
T-Mobile still finances phones directly and equipment payment plans are clearly separated out from service charges
To be fair, car sellers have also started things like being able to brick your car if you're behind on payments. Or, for the up and coming ones, have the car just drive itself back to the dealer (Ford).
a patent is VASTLY different than it actually taking place. The number of patents that get filed but never actually implemented could fill the grand canyon.
> jump to another carrier and abandon the one with the finance plan. What’s the recourse for the carrier?
Subprime auto lenders use “electronic devices to remotely shut down vehicles” [1].
Carriers could install remote management profiles on phones financed for subprime borrowers. If a borrower defaults, the loan is sold to a collector and phone erased and put in lost mode.
It isn’t pleasant. But neither is being locked into a phone plan you don’t want.
The GSMA has a blacklist system. Participating carriers can blacklist a stolen / fraud / nonpayment phone IMEI and all the other blacklist members will agree to also ban that phone from their network. The problem is that people won't make payments, sell the phone for cash, and eventually the phone ends up in places (China, UAE, Nigeria, Russia, ...) that don't participate in the blacklist.
People made the same argument in Canada but they changed the rules so you either get an unlocked phone or they have to unlock it upon request. Yet there has not been widespread issues of this happening. They can still ding your credit & there is only a small number of carriers so you can only do that so many times before you are going to have serious issues if you don't care about your credit or collections.
Also you can still get the phone unlocked without the carrier anyways if you really want to so it would not deter anyone who really wants to run off with the phone anyways.
Currently the carrier will publish the phone's IMEI to a central blacklist, so the phone can't be used with any carrier that subscribes to the blacklist.
Also iPhones can be activation blocked via Apple, which is entirely independent of the IMEI block done by carriers.
