Fadi B. Rustom
Kavanagh, Scully, Sudow, White & Frederick, P.C.Are you tired of your long-term cell phone contract? Many customers are sick and tired of them for various reasons. Reception is too erratic. Tower coverage is insufficient. Service-providers are too unwilling to work out an acceptable service plan. The cell phone is out-dated or just out of style.
Many customers relegate themselves to staying put since that is usually the only affordable alternative to paying excessivelyhigh penalty fees for early termination—often $175 to $200 per line—and entering another long-term cell phone contract.
Don’t give up just yet. It is a little known fact that a customer under a long cell-phone contract is legally able to transfer their obligation to another person. The legal term used for this concept is for one person to assign obligations and rights under a contract to another person. The assignee or buyer—the person accepting the contract—can either assume all of the obligations and rights under the contract, or simply receive some of the obligations and rights under the contract, in which case the assignor, or seller, is still responsible for the unassumed obligations.
The problem, though, is that few people in this situation know others who are willing to assume a cell phone contract because they probably are also riddled with their own long-term contract.
With this problem in mind, entrepreneurs have recently created websites that help connect consumers who want to get rid of their contracts with those looking to assume one. This way, sellers can drop their cell phone carriers for a fraction of the penalty fee, while buyers can get a contract with a much shorter term than the now-standard 24 months, pay no activation fees, and, in most cases, receive a free cell phone from the seller. The most widelyused web site for this set of contact is www.celltradeusa.com.
The service is free for buyers, who can search ads posted by sellers based on criteria such as cellular company, contract length, monthly price or type of phone offered. Usually, the fee is around $20 for the seller and is due only after they start receiving emails from interested buyers or if they want to access the sender’s contact information.
Before you run to your computer, there are some important things you must consider prior to entering into such an agreement.
First, these websites are only a match-making service and cannot actually transfer the contract. The consumers must contact their cellular service provider to arrange for a transfer of the contract. Many of the major service-providers such as Verizon Wireless, Cingular, Sprint PCS/ Nextel and T-Mobile offer a similar program.
Second, before you arrange for an assignment, call your service provider and make sure they will agree. Some service-providers do this over the phone. However, it is advisable to put something in writing, especially if you are the seller. As the seller, you want to make sure you transfer all of your obligations because if the buyer fails to pay the bill, you do not want the service-provider coming after you for the unpaid bill.
Third, the buyer must apply for a credit check and qualify for service. Often times, potential customers do not pass standard credit check applications. In that case, the seller is left with few options but to keep looking for another potential buyer. Though many service providers alternatively offer a $300 to $400 deposit in lieu of bad credit history, many potential buyers of old contracts may be unwilling to pay that amount.
Fourth, you take the risk of entering into such an agreement with someone you likely do not know. Aside from the transfer of the contract, which can usually be handled through the serviceprovider, you most likely will also have to exchange the phone, accessories and other items. With this type of arrangement, you do so at your own risk because there is no binding agreement for the sale and purchase of the equipment.
Lastly, be sure to obtain the contact information of the other consumer involved. This way, if a problem arises, you will be able to contact the other person. IBI
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