April 15, 2004
"Dialing for Thieves"--A Commentary by Prof. Ian Ayres and Barry Nalebuff
(This essay was originally published in the April 19, 2004, edition of Forbes magazine.)
Dialing for Thieves
By Ian Ayres, William K. Townsend Professor of Law, and Barry Nalebuff, Milton Steinbach Professor of Management at the Yale School of Management
Every year thieves place millions of calls on lost and stolen cell phones. You might think that this is a crime designed for Keystone Crooks who really want to get caught. If someone steals your wallet, there's little that the police can do to track down the thief. But a cell phone crook leaves a bright paper trail.
Ian's cell phone was stolen last month, and the thief made more than a hundred calls before the service was cut off. The thief made 30 calls to a phone number registered to a young lady named Jessica, and that phone number called back to Ian's stolen phone several times. Jessica surely knows who stole Ian's phone.
Why doesn't the phone company or the police act on this information? This isn't NSA-level work.
You might think that tracking down thieves would be too expensive to be worth the phone company's time. But catching thieves could be a business opportunity. Many victims, including yours truly, would gladly subsidize the cost. We would be happy to pay $50 to know that the s.o.b. who took the phone is caught and punished.
Soon enough it will be possible to locate a stolen cell phone in real time. Manufacturers are set to begin hardwiring codes in phones to stop thieves who take handsets for the phone itself (which can be redeployed with a new SIM card). But that does little to thwart joyriders--that is, thieves who are after a few free hours of telephone service until the phone is disabled.
Why not start with embarrassing the thief? Anytime a stolen cell phone is used, a computer would automatically call the same number just after the thief's call is over. A recorded message would say: "This number has just received a call from a cell phone that was reported stolen. At the tone would you please identify the caller." We think that this is better than just turning off the phone (at least for a short time) so that the thief can be outed and the trail can be marked.
Why would anyone tell on a friend who's just called him? Civic responsibility. You might be upset to learn that you or your kid received a call on a stolen phone. But another reason might be self-interest. The law could require telephone customers to pay for any calls they receive from stolen cell phones. Or at least require the recipient to pay, if he or she is not willing to identify the thief or make a plausible case that the calls were from a stranger.
This might sound unfair. But it's really just treating the receipt of stolen services the way the law currently treats receipt of stolen goods. If you buy a TV at a garage sale for $100 and later on find out that the TV was stolen, you have to give the TV back to its rightful owner. That's true even if you didn't know the TV was stolen when you bought it. You're out the $100 unless you can get the money back from the garage-sale seller.
This rule makes even more sense for stolen services, especially cell phone calls, as it is so easy to locate the recipients. They may be unwitting participants in the theft, but, as with the stolen TV, that's no defense.
The person receiving the call should be responsible for the cost of the call--unless, of course, he is willing to reveal who called. That gets the recipient off the hook. Unlike the buyer of a stolen TV, the recipient of a stolen cell phone call can (usually) identify who the real thief is. Jessica received 30 calls on Ian's cell phone. Oh yes, she knows.
The payment onus could be done via contract or law. Your service contract with the cell phone company could stipulate that you are responsible for payment on all received stolen calls, unless you identify the caller. Failure to do so would lead to a fine and termination of service. (There would be an exception for wrong numbers and the like, very short calls where the recipient might not know who was on the other end.)
Ian called Jessica and the other numbers that were dialed from his stolen phone. Some hung up. The local weather recording was of little help. But other callees had a guilty conscience, especially when they knew they were no longer anonymous. One said he would help Ian get the phone back and did. He handed it to Ian at a McDonald's a few hours later.
A better law and a better contract could put a real dent in cell phone pilferage.
Ian Ayres and Barry Nalebuff are professors at Yale Law School and Yale School of Management and coauthors of Why Not? How to Use Everyday Ingenuity to Solve Problems Big and Small.