Sites help free cellphone users from contracts
The pesky termination fees that kick in when unhappy cellphone customers decide to cancel service early have spurred an Internet cottage industry of companies that help liberate people from their contracts.
The websites, Celltradeusa.com , Resellular.com , and CellSwapper.com , provide online marketplaces where customers trying to get out of their contracts can connect with people willing to take over the remainder of their contracts, for a fraction of the typical $175 termination penalty.
"You really tap into this emotional thing. When they find out they can't get service at their job, or maybe they had service in their apartment and one day all of a sudden it stopped working," customers get mad, said Eric Wurtenberg , cofounder of Celltradeusa.com, which has more than 2,000 listings on its website. "We deal with a lot of irate people."
Hefty termination fees are a frequent gripe among cellphone customers. State Senator Michael W. Morrissey , a Democrat from Quincy, drafted legislation late last year that would allow customers who experienced five or more dropped calls in a month to cancel their service without paying a fee.
A 2005 survey by the Massachusetts Public Interest Research Group found that 36 percent of cellphone customers surveyed said that the early termination fee stopped them from switching providers, and 47 percent of respondents said they would switch or consider switching providers to get a lower rate or better service if they didn't have to pay the fee.
Each service works in a slightly different way, but the idea is the same: Customers post an online advertisement with the details of their contract, and any benefits they're willing to throw in -- such as a free Blackberry, a Bluetooth headset, or money toward the contract. The services charge $19.99 at Celltradeusa.com and $14.99 at Resellular.com to people trying seeking to get out of their contracts. CellSwapper.com is still a beta version.
Once a person who wants to get out of a contract is matched with a person who wants to get in, the transfer must be made through the wireless provider.
That type of transfer is already available to customers who call their providers and have a relative or friend willing to go through a credit check and legally take over the rest of the contract. But these Internet services allow people to look beyond their immediate friends and connect with a nationwide network of people.
"I really consider it more like a dating website or an eBay. We don't actually provide the service -- we just get the people in touch," said Joseph Armstrong , founder of Resellular.com.
Termination fees exist for a reason. Customers in the United States rarely pay full price for a phone, so providers require them to sign up for long-term plans to ensure that they will make that money back.
"Providers spend on average $400 to acquire one customer, and because of those discounts they give on those really cheap phones, they do take a hit when customers bail out early," Wurtenberg said .
Cellphone carriers are skeptical of the service.
"We do not endorse any of these third-party websites, or the service fees they charge. Instead, I would recommend that should a customer want to transfer service to someone else, that they both work directly with Verizon Wireless, which can transfer contracts for free," said Verizon Wireless spokesman Michael Murphy. He added that in November, Verizon Wireless began to offer a pro rated termination fee.
"If a customer is unsure about making a commitment, we would recommend that he or she purchase GoPhone -- our pay-as-you-go service," Cingular Wireless spokesman Kate MacKinnon said.
Sprint Nextel Corp. spokesman Mark Elliott said that the option of transferring a contract to another person has always been open to customers.
But the website entrepreneurs think their services are bound to take off. Resellular is waiving its service fee during January, and Celltradeusa will soon unveil its new logo -- an alien who is stuck on earth because he signed a two-year contract.
Carolyn Y. Johnson can be reached at cjohnson@globe.com. 
