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A bug in the current version of iOS 7 appears to allow users to disable Find my iPhone on a device without typing in a password



From MacRumors:
Deactivating Find My iPhone takes just a few simple steps and it can be easily repeated on devices running the current version of iOS (7.0.4). The exploit involves making a few simple changes to the iCloud account section of the Settings app. Video via Bradley Williams MacRumors has been able to successfully replicate this bug on an iPhone and an iPad running iOS 7.0.4, but could not get it to work on a device running iOS 7.1, so the flaw will likely be fixed with the upcoming update.
  iOS 7 Bug Allows Disabling of 'Find My iPhone' Without Password