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I don’t think it just comes down to morals. Maybe he simply doesn’t have the money. Maybe paying the phone bill is the difference between him/her or their children eating or not. Sure it’s a smart idea to advise them of the long term risks in not paying, but all the posts saying “just pay the bill” aren’t all that helpful don’t really take the whole situation into consideration.
S/he found the money to get 2 other phones.

People like this always ask the question over and over until they get the answer they like.

Right answer be damned
 
How is it "fraud"?

One of the Cambridge dictionary entries defines fraud as:

fraud noun (CRIME)

So I could see how someone saying you obtaining property (the iPhone) by deceiving people (not paying it off but instead purchase other phones) or you obtaining property (the new phones) by deceiving people (by not telling the new carrier you didn't pay off your previous phone) could be considered fraud.
 
Then why did it show clean? That's what I don't understand.
May be clean as in not flagged as stolen, but just locked to AT&T due to outstanding installments.
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A lot of ignorance in this thread. People acting like not paying a phone bill is the worst thing in the world. People thinking the phone police are going to come take your phone away. There are lots of reasons you may not pay a phone bill. Maybe you are focused on rent or food for children. So many people saying “just pay the bill.”. Do you all work for the carriers or something? Or just own stock in them?
Exactly, and maybe they didn't see the part about medical. Healthcare pricing if effing ludicrous. Although, it's not supposed to hit credit as bad, so just pay minimal what is affordable on medical and concentrate on the rest. Plus between medical and crap happens with job loss or whatever other emergency, it's not always the persons fault.
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I highly doubt the OP is some father of three starving, orphaned kids.

If they were in severe financial straits, why are they buying several new phones?
We know there is medical involved, just not how badly, so they might need a phone. But the one argument I would agree with is why smart. Why not just a basic phone or even some budget smartphone?
 
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deceiving people (by not telling the new carrier you didn't pay off your previous phone) could be considered fraud.

Perhaps I missed something, but why would the OP be obligated to tell the new carrier that s/he didn't pay off their previous phone?
 
Again OP (and no judgement here), to answer your initial question; yes, you essentially have a paper weight unless you make good with AT&T.
 
Yes, your not-paid-for iPhone is now an iPod and your credit will likely take a huge hit.
We've established that my credit was already crap before with unpaid medical bills in the thousands, and as a result the AT&T account had already been placed for collections.
 
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