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AT&T sues former employees over phone unlocking hack scheme

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AT&T has brought a lawsuit against three of its former employees and an Anaheim-based IT company, alleging that the group conspired to install malware on company computers that would illicitly generate unlock codes for customer phones. According to the suit, Anaheim's Swift Locks company worked with customer service reps in AT&T's Bothell, Washington center to nab unlock codes for phones that were still under contract (and therefore not eligible to be moved to another carrier's network) and then sell them for a profit.

Reportedly, the customer service reps installed malware on their company computers which gave Prashan Vira, who runs Swift Unlocks, and 50 other SU employees/unnamed co-defendants access to their machines. The Swift Unlocks team then apparently ran a program that generated the unlock codes using the service reps' credentials. According the the lawsuit, the reps were paid $2000 every two weeks for their cooperation (netting between $10,500 and $20,000 before the scam was discovered) and Swift Unlocks gained access to "hundreds of thousands" of unlock codes.

"Locking" phones into a single carrier allows service providers like Verizon, AT&T or Sprint to guarantee that their customers will stay for the duration of their contract (or at least force them to pay off the cost of the phone if they should break said contract). The act of unlocking a phone removes that block and enables the phone to work on other networks. Legally, only the carrier is allowed to unlock a phone using its network, however a number of grey-area sites like Swift Unlocks do offer discounted workarounds.

[Image Credit: Bloomberg via Getty Images]

*Verizon has acquired AOL, Engadget's parent company. However, Engadget maintains full editorial control, and Verizon will have to pry it from our cold, dead hands.

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