Buying a used cell phone can save you a lot of money, but if you end up with a phone with a bad ESN you'll have nothing more than a very expensive paperweight. The ESN is used by wireless providers to track phones for billing and prevent fraud, and a phone with a bad ESN becomes unusable by anyone.
The Electronic Serial Number
In order to identify mobile phones for billing and account verification purposes when making calls, phones using CDMA technology -- those that do not use SIM cards -- are assigned a 32-bit Electronic Serial Number. Each phone has a unique ESN that it transmits to the network when you attempt to place or receive a call. Since 2006 the Mobile Equipment Identifier, or MEID, has replaced the ESN, but the term ESN is still colloquially used to refer to a phone's unique identifying number.
When Good ESNs Go Bad
An ESN can go bad for one of three reasons. The phone can be reported as lost or stolen, the phone is still active on a wireless account, or the phone is no longer active but has an outstanding balance due on the account it was last associated with. A phone with a bad ESN cannot be activated for use on any network, and the bad ESN can only be cleared by the original owner of the phone.