TODAY   |  May 23, 2013

Rossen Reports: Are new ATMs fueling cellphone theft?

New machines popping up in malls across the country enable you to trade in a used cellphone for cash. Some law enforcement officials say the ATMs are making it easier than ever for criminals to profit off your stolen phone. NBC’s Jeff Rossen investigates.

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>>> we're back at 7:42. this morning on rossen reports, thieves targeting your cell phones . some officials say a machine that's popping up in malls across the country is actually inspiring criminals. today national investigative correspondent jeff rossen is in los angeles with more on this. jeff, good morning.

>> hey, matt, good morning to you. sounds like a great idea. an atm where you can trade in your used cell phone and get instant cash for it. but now some police say these machines are actually making it easier than ever for criminals who can steal your phone and quickly profit from it.

>> they strike without warning. thieves snatching cell phones right out of your hands. some victims even getting beaten up.

>> hi.

>> now a top cop says these machines are fueling the violence.

>> it's a motivator for the criminal element.

>> they're called eco atms , kiosks that recycle your used cell phones . there are more than 400 of them in shopping malls across the country. here's how they work. you put your phone in a bin, the machine scans it for market value, and then gives you cash right on the spot. but critics say these machines are driving thieves to steal more phones for a quick payout. washington, d.c. police chief kathy lanier.

>> i can knock you down, steal your phone, find an atm and get up to $300 in cash for that phone.

>> a thief stole her iphone right from her purse. she used an app to track it down and found it at this mall inside an eco atm . she got it back.

>> they made it so easy for the thieves. it's a magnet.

>> police say stolen phones have turned up inside eco atms nationwide. from georgia to texas to california. the company says it has a system to keep criminals away. first, scanning the person's driver's license and then taking a photo of them.

>> and we have a team of people who verify in realtime that the person who is standing in front of the machine is the person who is placed in the license.

>> what happens if the person in front of the machine isn't the same person in the license?

>> we deny the transaction.

>> we found that's not always true.

>> i need to take your picture.

>> we sent these two producers who obviously looked nothing alike to eco atms in two new jersey malls.

>> please press your driver's license against the scanner block.

>> we had this producer use the other one's i.d. to cash in a phone. it's clearly not her, yet the machine still takes the phone and spits out the money.

>> don't forget your cash.

>> same result at another eco atm . remember, the company makes money off the phones. we shared our findings with them.

>> i want to show you a picture.

>> sure.

>> does this look like the same woman to you?

>> no.

>> what if i told you this woman went up to your machine and used her i.d. and sold two different phones.

>> i would say we missed that one.

>> twice.

>> we learn from each transaction we do.

>> if we found this in one day, who's to say this is not happening at a lot of your kiosks in a lot of different states a lot of different days?

>> well, we work hard to make sure it's not.

>> he says out of every 10,000 phones bought, they discover five are stolen and those are returned. but d.c. police say they're finding a lot more than that. tracking at least 200 stolen phones to these machines. eco atm says it also provides photos, fingerprints and phone serial numbers that have helped police make arrests.

>> we're collecting more information about these people selling stolen phones than anyone else.

>> working with us after the fact helps, don't get me wrong.

>> the phone companies says because of our investigation they're reviewing their i.d. verification system and looking for ways to improve the system and employee training. here's the take away. right now, grab your smartphone and write down the serial number of the phone if it's ever stolen, matt, police say that's the best way to track it and get it back.

>> that's good advice. thank you very much.