A new Web site claims to enable consumers to swap their cell phone contracts with others. Consumers now face hefty termination fees if they want to terminate their contract early, even if it's because service is inadequate in their area.
Consumer advocates urged caution, however, and said that carriers might not recognize the transfers.
Most cellular service providers, incluidng such major carriers as Cingular, Verizon, T-mobile and Nextel, require a 1-2 year cellular service agreement to activate their service. Cellular customers wanting to get out of their contract are now "stuck" in most cases, although a few states allow early termination in certain circumstances.
Celltradeusa.com says it provides a solution to this dilemma. It hopes to build a community for the 180 million current cell phone users in the US and Canada seeking more choice and flexibility. The service connects people that want to get out of their contract and matches them with deal-seeking customers that want to pick up a contract.
Celltradeusa.com does this by allowing its "Get Out" members to register for free, and provides an incentive system based on free phones, cash, and other "creative" barter arrangements to entice other people to take over contracts.
"If you've ever spoken with someone stuck in a cellular service contract with inadequate service, you quickly realize the value of the Get Out option. We also appeal to the deal seekers of the cellular world with the 'Get In option.' And the service provider gets the new satisfied customer, it's really a win-win for everybody," says Eric Wurtenberg, co-founder of Celltradeusa.com.
"It's a clever idea but consumers should be aware that their cell phone carrier may not recognize the swap," said ConsumerAffairs.com President James R. Hood. "If you read your cell phone contract, you will most likely find a clause that prohibits you from making any 'transfers and assigns.' Thus, your carrier would not be obligated to recognize a contract swap."
"Even if your carrier agrees to allow the swap, it will most likely come after you if the new customer falls behind in his or her payments," Hood warned.
The company responds:
Thank you for bringing awareness to your readers about our celltradeusa.com service. However, we would like to address a couple of issues that were in your consumer report.
1. Celltradeusa.com is a listings site that matches cell phone consumers together through our incentive based system. After we connect the consumer, the entire transfer process is conducted through the respective provider. There will be no delinquency issues because the provider will qualify the person transferring the contract responsibility before any trade is authorized. The Get Out person will be fully removed from the contract obligation after the trade (with the provider) is completed.
2. Transfer of responsibility is something that ALL the providers already offer to their customers. Celltradeusa.com expands on what the providers offer to their customers by offering a listings service that allows users to find matches they would have had a hard time finding without our service.
3. The actual process is not mandatory for ""swapping" or as we call "clean" swaps. The Get Out customer first finds someone who wants to take over the contract. After the provider qualifies that person, the Get In customer assumes the contract responsibility, and the Get Out customer does not have to take over anyone else's contract for the service to work. They can walk away to buy new, or if they'd like they can go through the process of becoming a Get In customer. Cell swapping is a possibility, but the majority of our transactions are not swaps. And ALL transfers are conducted through the respective provider. We rely on the provider to conduct the transfers that they already offer to their customers.
I hope this clears up some issues surrounding our service. I think our press release is party to blame and I will ensure that the release will expound the details more clearly. Thank you for your time and consideration.