Drop a whole phone in this ATM, get some cash. But at what cost?

Cecilia Kang / The Washington Post /

Published Mar 24, 2013 at 05:00AM

It’s an easy way to get some cash. But the process of dropping an old phone and getting a couple hundred dollars is so simple that police fear these ecoATMs are fueling one of the nation’s most pervasive criminal trends — cellphone theft.

The kiosks have become a particular thorn for police in the nation’s capital, where 40 percent of all forced robberies last year involved a phone, the highest percentage in the U.S.

“This is a huge problem. The opportunity for quick cash is driving robberies of smartphones,” said Gwendolyn Crump, a spokeswoman for the Washington police.

The stolen smartphone market is thriving largely due to an unregulated trade that spans the globe, authorities say. Used Apple devices are in strong demand overseas, where an iPhone 5 can sell for $500 or more. (It costs as little as $200 in the United States, because it is subsidized by cellular carriers.)

Sales of used smartphones are expected to reach $5 billion by 2015, according to Gazelle, a Boston firm that offers money for smartphones online. The company expects revenues of $100 million this year.

EcoATM and other similar firms say they are being unfairly blamed for phone thefts. The companies said they scan the unique IDs of the cellphones they acquire and check them against police databases that list stolen phones. Matches are extremely rare, they say — probably because there is no national database. EcoATM operates about 340 kiosks across the country, including a smattering in Western Oregon.

An ecoATM can operate without a human being. The kiosk automatically scans a person’s ID, snaps a picture of the customer and takes a fingerprint. It then automatically checks the unique phone ID against a local police database, which is updated regularly. If the ID isn’t on the list, the machine instantly dispenses cash to the user. There are no limits on the number of phones an individual can deposit.

Smartphones have become the target of too many violent robberies, police say. In the summer of 2011, a father in Washington, D.C., was beaten with a baseball bat for his iPhone and suffered permanent brain damage. Police there set up fencing operations that recovered nearly 500 stolen phones last year from stores and individual dealers.

One solution has been to create a national database of stolen phones, an idea championed by Washington Police Chief Cathy Lanier. Wireless carriers would be banned from activating any phone that appeared on the list. But the effort is only now getting going. And the database won’t curb the growing international problem of stolen phones being reused abroad. EcoATM says about 20 percent of the thousands of phones it collects each day are sold outside the United States.