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Selling Your Old Phone Online? Watch for Pitfalls

Image: Used cellphones

Some websites that promise a quick and painless process for selling your old electronics end up providing neither. Bloomberg / Bloomberg via Getty Images

You got your holiday wish -- a new smartphone or tablet -- and you want a simple way to turn the old one into cash. Dozens of sites buy unwanted electronic items. They promise to make the process quick and painless.

And while many websites make good on that vow, be advised: Fraud.org, a website run by the National Consumers League (NCL), reports a spike in complaints from people about one group of sites.

To understand the problems reported, you need to understand the process. Typically, you just fill out some basic information about the device - such as model, memory and condition - and get an instant quote. If you agree, you can print out a prepaid shipping label and send in the device.

Because these companies can't verify the condition of the equipment until it arrives, they retain the right to provide a revised quote before the transaction is finalized.

"These sites offer a high initial quote on the web, but once you send in the phone or computer, you may get a dramatically lower revised quote," said John Breyault, director of NCL's Fraud Center. "Essentially, it's a bait-and-switch kind of situation."

Breyault told NBC News that when unhappy customers call the company to get their phone or computer back, they may be disappointed again when they are told that their device has been processed or sold and cannot be returned.

"I was furious"

Sally Stasio of Kensington, Maryland tried to sell a smartphone to eCycleBest.com a few weeks ago. She figured she could get close to $100 for her Samsung Galaxy S3 in "nearly new condition" on Craigslist, but she decided to go with eCycleBest when they offered her $133.

After she sent in her phone, the company's revised offer came back at just $20. eCycleBest claimed the phone's condition "was not as specified." Stasio told NBC News, the phone was "in perfect condition with no scratches whatsoever."

The company did not respond to her email, so she called repeatedly, she said, adding that she was on hold for more than an hour in some cases, but she could never talk to anyone.

"I was furious, not only about the quote, but the frustration of messing with this," Stasio said.

The company deposited $20 in her PayPal account, which she refunded. Frustrated, she complained to Fraud.org and the Better Business Bureau. After those complaints, another $40 showed up in her PayPal account. Again, she refunded the money and told the Better Business Bureau she just wanted her phone back so she could try to sell it herself for full value.

"I feel like I was robbed," Stasio said. "And I feel like an idiot for actually believing what was advertised on this website."

Stasio still doesn't have her phone and has no idea if she'll ever get it back.

Company boasts many happy customers

eCycleBest and CashforLaptops, as well as about a dozen other sites are run by Laptop & Desk Repair, LLC (LDR) of Sparks, Nev. LDR has a "D+" rating with the Better Business Bureau which received 1,234 complaints about the company in the last three years.

In comparison, cellphone trade-in company Gazelle has an A+ rating from the BBB, with 181 complaints in the last three years.

According to the BBB report on LDR, "consumers allege the business obtains their interest by offering a high quote online and then lowering the quote upon the business' receipt of the electronic device."

Andrew August, LDR's attorney, told NBC News the company purchased 90,000 devices in 2014. He characterizes the number of complaints to the BBB as "extraordinarily small" relative to the number of transactions made.

"You can't please everyone, but if you please most of the people most of the time, it's pretty damn good," he said.

August said the company's initial quote is based on "good faith" that the customer has provided accurate information. Some people try to game the system by sending in a broken phone and then claiming the damage happened during shipping, he said.

The company's policy is to return a device when the revised offer is not accepted, August said, although he conceded it's possible that did not always happen.

August noted that LDR is a small company that was swamped with old phones after the iPhone 6 went on sale and simply didn't have the infrastructure in place to handle all the calls. He said the situation has improved and customer service agents are often able to negotiate a better price when people call to question the revised offer.

Daniel Noennig tried to do that in December.

According to the Lincoln, Nebraska resident's complaint to the BBB and Fraud.org, CashforLaptops offered him $313 for his old iPad. He considered that a fair offer and sent it in. Almost two weeks later, he got an email from the company that said that based on "up-to-the-minute market conditions" it would only pay him $45.

Noennig felt cheated, so he called the company. He said he finally got through after hours on hold, and after a lot of haggling with the customer service agent was offered $200.

He decided that was not good enough and asked for his computer back. Noennig said he was told that wasn't possible because the iPad was already being processed. A few days later, he found $200 in his PayPal account.

"My blood has been boiling about this," Noennig told NBC News. "I'm glad that I got what I did, but I feel completely taken by the whole process and the way I had to fight to even get to $200."

How to do it right

If you decide to sell an unwanted phone or computer online, do some research so you feel comfortable with the company. Fraud.org provides these tips:

  • Check for consumer feedback about a particular service before shipping the device. Websites like Yelp and the Better Business Bureau can be very helpful.
  • Carefully review the terms and conditions before you ship the device. Some services require extremely quick turnaround times (as little as three days after the revised quote is sent to the seller) for confirmation or rejection of the offer. If the consumer misses the email and doesn't respond, the offer is deemed accepted, regardless of the price quoted.
  • Assume that the initial quote you receive via an online form is likely to be higher than the quote you receive once the device has been inspected. Shop around and compare quotes. Be cautious of any quote that is dramatically higher than the others.

If you feel that you've been cheated in some way, you can file a complaint with the Better Business Bureau, your state attorney general or consumer protection office and Fraud.org.

Remember: When it comes to getting rid of an old electronic device, you have a lot of options. Besides selling, you can also recycle or donate to charity.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.