Thousands of usable iPhones trashed by one Colorado firm because well-meaning donors forgot to turn off “Find my iPhone”

In neatly sorted stacks and bins in a warehouse in Lafayette, 3,378 smartphones and tablets are waiting to be trashed. They are all used, all donated in the past three weeks, and most are in fine working condition. There are even four Apple iPhone Xs.

But this batch of iPhones and iPads won’t join the roughly 23,000 other devices — also donated in the past three weeks — that are destined to be repaired, refurbished and reused. That’s because they still have Apple’s “Find my iPhone” anti-theft feature activated. This so-called kill switch stays put even on phones wiped of their data and returned to factory settings. The devices cannot be reused, so they are raided for parts and sent to the scrap-metal heap.

Activation locks aren’t disabled on donated phones because the original owner probably forgot, didn’t know or just didn’t turn off the feature before giving it away. But it could still be on because the phone was reported lost or stolen. A recycler like The Wireless Alliance in Lafayette doesn’t know for sure and can’t track down the user anyway, founder Peter Schindler said.

“You mine a lot of resources from several different areas around the world to make a cellphone. The more that we can save, the better it is for the Earth,” Schindler said. “There are many ways we can get this solved, but let’s first make the problem clear and hopefully move forward so we can develop a system where certified recyclers like us are allowed some form of sane access on the back end.”

Two trends are colliding as the tech industry improves data security while environmentalists push consumers to recycle.

A new report from the Colorado Public Interest Research Group spotlights the collision at the warehouse in Lafayette. The Wireless Alliance, which counted 66,000 locked iPhones out of 6 million donated devices since 2015, said the rate is growing. Last year, about one in four iPhones that ended up in the warehouse were locked.

The Wireless Alliance, which buys phones donated to groups like Goodwill, is seeing a reverberation not just on recyclers but also on charities and people with good intentions.

“We’ve had customers call in who sent in a box from their kids’ soccer team and say, ‘Why did we only get a few cents for this iOS device?’ We said it’s because it’s activation locked. And they get furious and say, ‘If we had known, we would have turned it off. My son could have done it in two seconds. He’s a whiz,’” said Andy Bates, vice president of The Wireless Alliance. “We try to let people know about it on our website and when they’re trading it in. But we don’t always have the luxury to tell (individual) customers.”

The company wipes all data from phones and adds new software. Then it sells phones to buyers, like repair shops that can fix cracked screens, or to organizations that refurbish old Nokias for customers in South America. Prices vary. But locked phones sell for 30% of the price of a working, used phone. The companies that buy locked phones are often from Asia or the Middle East, but they don’t reuse them. They tear them up for the battery or LCD screen and shred the rest, Bates said.

“If you have a fully functional phone that sells for $100, a locked version sells for $30, which is basically what the LCD price is,” Bates said, adding that Samsung and Google phones also have kill switches but those can be reset during the data-wiping process.

This is also a different kind of lock made by mobile-service carriers like AT&T or T-Mobile. Those phones can still be reused if the new user sticks with that carrier.

But even companies like AT&T, which accept trade-ins for new phones, require the customer to first disable the activation lock.

“In the event a device arrives with the activation lock still enabled the device is destroyed,” AT&T spokeswoman Suzanne Trantow said.

Activation-locked phones started showing up when Apple launched “Find my iPhone” earlier this decade to help consumers find their lost or stolen devices. The feature links the device’s hardware ID to a user’s account, so when a new owner tries to log into Apple’s server, a message pops up instructing the user to type in the correct Apple ID and password. If you don’t have the log-in credentials, Apple says, “you need help from the previous owner.”

For repair shops, this isn’t a big issue because local mom-and-pop stores deal directly with owners who can unlock devices on site. But it gets at the right to repair or reuse a phone debate, said Gay Gordon-Byrne, executive director of The Repair Association.

“The industry in general, they cannot get around the activation locks. They really are locked. The manufacturer, Apple, Samsung or whoever it is, has to provide permission and they haven’t,”  Gordon-Byrne said. “I don’t think it’s a legitimate problem with law enforcement, but if these things are stolen, we could separate them (out) and give them back. These things are sitting in piles.”

Smartphones still tempt plenty of thieves. But “Find my iPhone” has helped law enforcement track down stolen devices and deter thieves from stealing a phone that are quickly rendered useless with the kill switch. After a California law went into effect in 2015 forcing manufacturers to install kill switches, smartphone thefts declined 50% in three years, according to a story in The San Francisco Chronicle.

The Denver Police Department also saw a decline in iPhone thefts since 2013 when 494 reports came in. Last year, there were 419. Victims often file a police report for insurance purposes but they’ve also called the police after locating their phone using Apple’s service, said Jay Casillas, a Denver Police spokesman.

“We get calls for service and some of those calls do include, ‘My phone is stolen and I’m picking up the GPS location in this area. Can you come help?’ Sometimes we’re successful and sometimes we’re not,” Casillas said. “The biggest thing we’ve noticed is they get stolen because they get left out in cars.”

The Wireless Alliance and CoPIRG began comparing notes and in January, they randomly tested 100 donated iPhones and checked them against law enforcement and mobile-service carrier databases. Six were reported lost to Apple and two were reported stolen by the carrier.  

But the problem for a recycler is that even if a device is reported stolen, it’s not easy for anyone to find the original owner. And there is no simple system shared between Apple, mobile service carriers and the secondary market to find that owner.

“It’s really a big pile of obsolete, bricked devices that we’d like to get reused,” said Bates, with The Wireless Alliance.

Apple, for its part, has won wide acclaim for keeping iPhones secure. After a 2015 shooting in San Bernardino, California, that left 14 dead, the FBI demanded that Apple unlock the shooter’s phone. Apple refused. The FBI later said it figured out how to crack iPhones on its own.

While Apple has an extensive recycling program, it hasn’t addressed the rise of phones donated to the recycling industry that are locked and useless.

Consumers getting rid of their old Apple device should turn off the “Find my iPhone” feature during the process of deleting data and resetting the phone to factory settings, says Apple

“It’s not smart for a customer to turn in their phone without deleting their data. That’s why we make it literally three taps to make it happen,” an Apple spokesman said, adding that “if that person who is trying to resell the phone does not have the customer’s iCloud ID, that activation lock is still on the phone.”

 

 

 

 

 

What CoPIRG hopes to do with its report is encourage creating that link between manufacturers like Apple and secondary markets, like the Wireless Alliance. For example, manufacturers could work with recyclers to remove activation locks from phones that are verified to not be stolen. Or there could be a system that notifies the person who donated the phone to verify it was a donation, which would immediately unlock the phone.

“For most of the phones, people donate them because people want them to be reused,” said Danny Katz, CoPIRG’s State Director. “The anti-theft device, while serving a purpose on the front end, is having unintended consequences on the back end.”