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City Council today passed an ordinance introduced by Mayor Rahm Emanuel and Chairman Edward Burke to crack down on the secondary market for stolen phones. The new measure aims to reduce the value of stolen cell phones in an effort to end any incentive to commit crimes relating to robbing resident of their smart phones for a profit.
"I am pleased to have worked with City Council to pass this major crackdown on the illegal secondary market for stolen cell phones,” said Mayor Emanuel. “This is an important part of a comprehensive plan to reduce violence that includes legislation, technological advancements and improved training. I am pleased it passed unanimously in committee this afternoon bringing us one-step closer to diminishing the threat of cell phone robberies."
The ordinance will regulate the second-hand cell phone market to further diminish the value of stolen phones. The new ordinance is the city’s latest public safety effort and aims to reduce cell phone robberies, and the violent crime that often comes with them.
“The secondary market for stolen cell phones affords criminals an economic incentive for committing these heinous and often violent crimes,” said Alderman Ed Burke. “By taking several meaningful steps, this ordinance makes it harder to profit off of these stolen devices. In the City of Chicago you should not have to worry about using a cell phone in the open.”
Despite recent local and national regulatory efforts, the illegal market for stolen cell phones continues to grow. The Federal Communications Commission estimates that one in three robberies nationally involves the theft of a mobile device. In 2016, nearly 14,500 phones were reported lost or stolen in the city. Over Labor Day weekend, Chicago Police Department (CPD) Detectives from the Bureau of Organized Crime and the officers in the 15th Police District joined forces with Department of Business Affairs and Consumer Protection (BACP) to conduct Operation “Cell U 1,” an undercover operation into the business practices of XL Wireless. Operation “Cell U 1” found the store’s operators purchased stolen cells phones for later resale totaling nearly $5,000. This ordinance gives both BACP and CPD more tools to hold these types of illegal second-hand dealers accountable for contributing to the illegal cell-phone market.
“As one measure in a wide-ranging set of reforms and improvements aimed at reducing the violence in Chicago, this ordinance will tighten our grip on the secondary market of stolen cell phones,” said Chairman Ariel Reboyras. “By minimizing the upside for criminals, we are preventing crimes before they happen, lessening the strain of resources on our police and providing peace of minds to our residents.”
Stolen cell phones maintain their profitability due to their retained street value from the secondary black market. CPD estimates that the average street value for a stolen cell phone is about $100, and second-hand dealers are then able to resell those stolen phones through illegal channels for an even higher profit, depending on the phone model. This ordinance aims to disrupt the secondary market for stolen cell phones at the point of sale, and thereby mitigating the violent crime associated with cell phone theft.
“The scourge of cell phone robberies make all of our residents feel less safe,” said Alderman Emma Mitts. “This ordinance will deter these violent crimes before they even happen. I am grateful for Mayor Emanuel’s leadership and for all of my colleagues who have gotten behind this essential effort.”
The ordinance contains a mix of new and strengthened regulations to help authorities track stolen cell phones and increase enforcement against those who profit from their unlawful sale, whether online or in-store. These include mandatory cross-checks with the stolen phone database to protect consumers, holding illegal cell phone dealers accountable through license revocation and confiscation of stolen cell phones at second-hand dealerships throughout the City, increased transparency and notification requirements and additional public education.
“The Mayor’s ordinance provides BACP the tools to shut-down the stolen phone pipeline - outfits that are illegally fencing stolen phones are hotspots for neighborhood crime,” says Rosa Escareno. “By working closely with police we can weed out problem business, protect consumers who fall prey to stolen phone sales and further protect residents across the from senseless crimes. This new ordinance gives BACP an effective one-two punch aimed at shutting down the bad operators and eliminating the pipeline for reselling stolen phones.”
This builds on the city’s 2014 ordinance that required those providing cell phone unlocking services to keep records on their customers and the device, as well as regulations of secondary sellers around record keeping and new licensure requirements.