Kill Switch Legislation: Billions for Consumers or Companies?

The wireless industry makes a metaphorical killing each year in a couple of areas related to smartphone theft. They make money by selling insurance plans to consumers who are concerned about having their cellphones stolen. They also profit by selling replacement phones to those who actually have had their smartphone stolen. A simple technological fix, but one that probably will not become ubiquitous without kill switch legislation, is to add a kill switch to cell phones. This feature has the potential of taking profits away from cell phone companies, but giving billions back to consumers.

This figure is not a typo. Research from a recent study has shown that adding a kill switch to cellular devices could pump billions of dollars back into the pockets of consumers, on an annual basis. For example, in just one year, from 2012 to 2013, the number of stolen smartphones grew from 1.6 million to 3.1 million units. What does this mean in costs to consumers, including inconvenience and lost productivity?

In the United States alone, people spend nearly $6 billion per year insuring their cell phones. They spend more than $1 billion paying for the replacement of stolen phones (which, by the way, isn’t covered by basic cellphone insurance). If kill switches were built into cell phones, consumers could retain that $1 billion plus in replacement costs. They could also realize over $2 billion per year in savings by switching to the less expensive insurance plans that don’t cover theft or loss.

If legislation makes the kill switch a requirement, theft would certainly decrease because the phones would no longer have a resale value. Obviously, cellphone providers would be the biggest losers—if such a mandate were to go into effect. Thus, you can expect them to fight any such notion as long as they can. Consumers, on the other hand, want their billions back.

Smartphone theft has become one of the most common crimes in the United States. Many devices are stolen when a person leaves them in a public place, such as at a restaurant or gym. For now, there are services that can disable your device if it is stolen. However, since thieves know most people don’t pay for extra services like this, their existence doesn’t act as much of a deterrent. By requiring a kill switch on smartphones, thus rendering a stolen phone virtually valueless, kill switch legislation would provide one.