Sometimes sellers on marketplace or Kijiji. Sell people phones then turn around and contact their carrier to say they lost the phone or it was stolen so they can get a new phone. Carrier then blacklists the phone. The buyer of the used phone then is stuck with an expensive mp3 player.
Yes your phone would work on the network. If you want to bring your current number to PM you can start the process in store or online, just keep your current account active.
