Is That 'iCloud-Locked' iPhone on eBay Stolen? Probably!

If you've browsed eBay for an iPhone in the past few months, you've probably noticed the preponderance of auctions selling low-priced "iCloud-locked" phone. "iCloud locked?," I hear you cry. "But I thought iCloud just synced contacts!" No, dear reader, it's much more powerful than that, but in this case it means that these phones are almost certainly stolen.

iCloud Locked Apple has provided the very useful Find My iPhone tool for years, but it got even better after iOS 7.0 introduced the "reactivation lock," or iCloud lock. This means that if your iPhone is lost or stolen and you wipe it remotely with Find My iPhone, you'll need to enter your iCloud password to reactivate it.

This feature should mean that stolen phones have little value to thieves. After all, the thief can't use it or sell it as a fully functional phone. Plus, the fact that it's locked should tip off potential buyers that the deal isn't on the level.

And yet, a cursory search of eBay for "iCloud locked" returns nearly 1,000 results. These range in price anywhere from $50 for an iPhone 4s to $330 for a new iPhone 5s and are generally listed as "for parts or not working." In the course of writing this article, I saw one iCloud-locked iPhone sell for $220.

So It's Not Working? My sample size is really too small to say if iCloud reactivation has taken a chunk out of the iPhone theft. While eBay is popular, it probably isn't representative of all aftermarket iPhone sales. Person-to-person deals and other services, like Craigslist, are left out. I also can't see a history of past eBay sales.

Anecdotally, it does appear that iCloud-locked iPhones sell for less than fully- functional phones. eBay sellers, presumably hoping to maintain their high feedback rankings, also seem to make no secret of the fact that iCloud-locked phones are not fully functional. That certainly helps would-be buyers, but there's clearly still a market for iCloud-locked phones.

Is That 'iCloud-Locked' iPhone on eBay Stolen? Probably!

What that market is and how it works is still unclear to me. As phones they're not worth much to consumers, but there appears to be a thriving business of "seller refurbished" iPhones. It's possible that some individuals are repairing or rebuilding iPhones for sale and fueling their work with stolen, iCloud-locked phones. I've been told that it's possible to get just about anything repaired on an iPhone for under $5 in Vietnam. Perhaps that's the final destination for iCloud-locked phones.

It's also possible that the iCloud lock can be defeated and new software flashed onto the device. We reached out to Apple for comment on this point, but as of publication we haven't received a response.

Now, Apple isn't the only one trying to curb the sale of stolen phones. For example, there are many auctions for iPhones with "bad ESN," or Electronic Serial Number. These are phones which, for one reason or another, the wireless carriers have blacklisted. In some cases, it's because the phone is listed as lost or the original owner changed wireless providers. In other cases, they're simply stolen and sold on eBay.

Make It Better iPhone thieves and the sellers (we can't assume they're always the same people) are still getting enough money to make the risk of stealing and selling stolen phones worthwhile. To change that, we have to shift the economics of smartphone theft even further. This might include so-called kill switches, or greater cooperation between companies and law enforcement when it comes tracking down and recovering stolen devices.

But iPhone users have a part to play here, too. I've been told time and time again how smartphone users don't use the basic security tools at their disposal. So, if you're an iPhone user and you're reading this, put a passcode on your iPhone and learn how to use the tools in Find My iPhone. Let's make things just a little bit harder for the thieves, and better for us.

Image via Flickr user DeclanTM

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