Article

EcoATM Chief rebuts 'Today' show attack

The company's founder defends its security practices and relationship with law enforcement.

May 30, 2013 by Natalie Gagliordi — Editor of KioskMarketplace.com, Networld Media Group

When the Consumer Electronics Association awarded ecoATM one of its inaugural Innovation Entrepreneur Awards last October, CEA President and CEO Gary Shapiro said the company "epitomizes the entrepreneurial drive and spirit of innovation that powers our industry and the American economy."

The accolades continued for the San Diego-based startup. Funding continued to pour in, and the CEA invited the company to be part of a select group of businesses to exhibit for Congress during CES on the Hill.

But mixed in with the praise for ecoATM and its promising future were more dismal reports that its kiosks encouraged cellphone theft. The Washington, D.C., police department and its chief, Cathy L. Lanier, singled out the company in scathing reports in the Boston Globe, the Washington Post and just last week, NBC.

NBC Investigative Correspondent Jeff Rossen focused in on ecoATM's security measures and portrayed the previously lauded company as a menace to society for its theft-inducing, fast-cash business practices.

To Mark Bowles, founder and CMO of ecoATM, Rossen's report failed to represent the other side of the story — the one that shows the company's alliance with law enforcement and its dedication to deterring the use of its kiosks for criminal activity.

Below is Bowles' rebuttal to the NBC report and other negative press:

[E]coATM has recycled over 1 million phones over the past year. More than 99.95 percent of our transactions are from honest people that are eager to safely monetize their used electronics and help the environment. Cellphones do get lost or stolen, but ecoATM has the most rigorous anti-fencing program in the industry (described in more detail below).

The Today Show story inferred a great number of things that are not true and should be clarified.

Washington, D.C., Chief of Police Cathy Lanier (quoted in the story) and Jeff Rossen from the Today Show have collaborated on stolen phone stories four times over the past three years. The disturbing graphic crime footage is the same in all of the stories and none of these images are related to ecoATM.

In the previous stories, the wireless carriers are cast as the ones causing the problem. In this story, ecoATM is depicted as causing the problem. [E]coATM does not operate a kiosk in Chief Lanier's jurisdiction in Washington, D.C., and never has. In jurisdictions where we actually operate we have excellent working relationships with law enforcement and dozens and dozens of accolades for our collaborative approach and security features. These police recognize, as do thieves, that we have made ecoATMs the worst place to sell a stolen phone and as a result we rarely get one. In fact, we receive a report of a stolen phone for less than five out of every 10,000 we collect nationwide.

The Today Show interviewed several other law enforcement officials for their story from jurisdictions where we actually operate. These police departments supported and defended ecoATM in their comments to the Today Show, and after their interviews called us to let us know of their support.

But the Today Show chose not to include the contents of these interviews because that apparently didn't support the narrative that Jeff Rossen had set for this story. We invited the Today Show to our headquarters to review the myriad features and processes we deploy to deter theft and prosecute the rare cases of phone theft that involve our system. This too was not presented in the story.

Cellphones do get lost and stolen, and thieves have a multitude of options, but they also realize that ecoATM is the worst place to fence these items. In the rare case that a lost or stolen phone ends up in our machine, the consumer gets it back for free and we supply the police with all of the information necessary to prosecute the criminal, including the criminal's photographs, thumbprint, driver's license info, etc.

The Today Show story included an interview with a victim of phone theft where her phone ended up in an ecoATM. This incident is a very rare event and happened last year. As is our policy, the victim got her phone back at no cost on the same day and we provided all of the necessary information for the police to prosecute the thief. Had her phone ended up anywhere else it is unlikely that the victim would have ever gotten it back, nor the criminal been identified.

We operate over 500 ecoATMs nationwide. In preparation for every new installation, we contact and establish working relationships with local police departments to help combat this issue. The views expressed by Chief Lanier on the Today Show about ecoATM are not typical of law enforcement and the overwhelming majority is very supportive of ecoATM.

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Here is a recap the preventative measures taken for every transaction using the ecoATM:

• We scan each customer's ID and take their photo. These images are viewed in real-time from our headquarters where we have a team of trained reviewers verifying every transaction to ensure that the photos match and that the ID is valid.
• We collect the customer's thumbprint.
• We capture identifying information about the phone/device.
• This information is then actively reported to the police and national databases.

As a result of the above steps, thieves avoid using the ecoATM. Again, nationally we see only about five reported stolen phones for every 10,000 we collect. We are proud of our record in deterring and helping police prosecute cell phone theft.

(A similar version of Bowles' rebuttal is posted to Craig Keefner's blog for the Digital Screenmedia Association. That version includes links to articles that support ecoATM's position, provided by Bowles.)

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