If the IMEI was reported as lost/stolen, it may not re-activate.
So that would mean the phone is bricked or can it at least be used as a tethered computer?
It really depends on how the carrier handles it. Sometimes the IMEI is blacklisted and just won't work on major carriers, other carriers don't even bother reporting it. If it was a cheap enough device, the person may have simply changed their passwords, got a new device and a new SIM, and said fuggedaboutit.
If you don't want to return it, then factory wipe and try a new SIM card. The carrier can still see that IMEI, and may be able to track you down that way, especially if you roam on their network. Do they care? Who knows.
Wi-Fi only phone, at worst.
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