When Apple releases a new iPhone, for example, Gazelle and other similar sites tend to see large spikes in customers who are willing to sell or recycle older devices. Gazelle gives them cash for those devices which customers can then put towards an upgrade. For example, during the iPhone 5 press event in September, Gazelle saw two iPhones turned in every second. Gazelle also knows that iPhones and their smartphone brethren are hugely popular among thieves, especially in major cities. In San Francisco, half of robberies involve a cellphone; in New York City, the statistic is about 40 percent.

That’s why Gazelle, which is an easy avenue to get cash for a device, decided to partner with CheckMend. “We are closing off a channel for getting rid of stolen products,” Gazelle CMO Sarah Welch told me. The company has always done a free data wipe on devices it receives from customers so their data isn’t accidentally exposed to whomever ends up buying the used device later. Checking those devices with CheckMend is just “an extension” of that practice, she said.

“The vast majority of trade-ins we get are completely legitimate,” said Welch. “Mostly it’s people looking to upgrade to the latest and greatest iPhone. So we believe it’s a very small issue but at the same time we do not want to be a party to creating incentives for anyone to steal those products.”

If a device does match with at item in CheckMend’s database, it is returned to the seller.

Welch says CheckMend’s comprehensive database gives them the ability to check devices it receives against data about lost or stolen devices from several law enforcement agencies, the FBI, as well as all major carriers and “an exhaustive list” of smaller carriers. The database includes information from the national carrier-backed database that went live this month.

Thumbnail image courtesy of Flickr user samiksha 

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FCC Chairman Julius Genachowski

The feds have teamed up with law enforcement and the wireless industry to curb the theft of cellphones by essentially rendering them useless once pilfered and fingering the thieves if they try to activate them. U.S. mobile operators will ban any phone or 3G/4G tablet reported stolen from their networks and will work together to ensure that thieves don’t simply transfer stolen devices to a competitor’s service.

According to the Federal Communications Commission, roughly 40 percent of all robberies in major metropolitan cities involve cellphone theft, with criminals specifically targeting high-end devices like the iPhone, tablets and other smartphones.  “This endangers the physical safety of people all over the country,” FCC Chairman Julius Genachowski at a D.C. press conference Tuesday morning.

The FCC will work with U.S. operators to set up their individual databases, which will track unique device identifying numbers, and with the CTIA, the major carrier trade association, to coordinate those databases, making them accessible to other operators and local law enforcement agencies all over the country. The CTIA said the database among U.S. GSM operators will be set up by Oct. 31. The trade group and its members will also set up a separate LTE database in 2013 that will span all U.S. operators networks and work with international operators to prevent phones stolen in the U.S. from being activated overseas.

There’s still one problem. The unique International Mobile Equipment Identity (IMEI) number used by GSM, UMTS and iDEN can be changed if a thief has the right equipment. Activating a stolen phone with an altered IMEI could be as easy as purchasing a new SIM card, even with the database in place. What’s more, there’s currently no law on the books making altering IMEI numbers illegal.

U.S. Senator Charles Schumer (D-N.Y.) said he hopes to change that and plans to introduce legislation that would criminalize such tampering, making it akin to changing the vehicle identification number (VIN) on a car. “If you steal a cellphone it will be a worthless endeavor,” Schumer said at the press conference. “If you try to sell a stolen cellphone you will get caught.”

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