If you’ve wondered why AT&T recently increased the price of the iPhone 3GS from free to 99 cents, you weren’t alone. One of the best explanations so far involves the minimal price reducing a growing amount of fraud.
Although Apple cut the iPhone 3GS price to free with AT&T contract when announcing the iPhone 4S, there was quite a bit of head-scratching over the carrier’s pricing move, particularly due to the GSM-only handset eliminating an competitive reason for the carrier’s pricing change. Although AT&T gave no clue to the reason behind the price switch, the carrier CEO Ralph de la Vega remained “confident consumers will agree that [the iPhone 3GS] remains one of the best deals for a leading smartphone.”
Perhaps too good of a deal. AT&T had warned about possible shortages of the phone should it be offered completely free. Indeed, a plausible reason for the new 99-cent price could be to reduce such demand. However, the reader of one tech blog suggested AT&T wanted to ensure the free offer did not encourage fraud.
“I work at AT&T, this is being done to help prevent fraud as the 99 cents cannot be billed to your bill,” claims a MacRumors reader identified only by the handle Metcury46l. “Fraudsters are using stolen identities to steal these handsets,” the user explains, a problem that began when the handset was made free. By selling the iPhone 3GS, rather than giving it away, AT&T can require a credit card or debt card and an associated billing address. Mystery seemingly solved.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
16 responses to “AT&T Raised The Price Of The iPhone 3GS Price To Prevent Fraud”
And if you pay in cash?
Can’t pay cash when u order online
True. Was thinking they were speaking towards in-store purchases for some reason. I will go crawl back in my hole now.
Can’t pay cash to order any iPhone. iPhone’s must be order with Debit or Credit card.
Don’t even worry about it, it can happen to the best of us
So what happens when you buy in store then? Do they still require you to use a credit or debit card?
So, uh, if the guys committing fraud are stealing IDs, what is to stop them from stealing credit card numbers and ordering it for 99 cents? How many credit card companies will stop a transaction of 99 cents due to suspicion of a stolen card?
Don’t you need to setup an account when “purchasing” iPhone 3GS, requiring credit card information? I didn’t know they were literally handing out free iPhones just for walking in.