Buying a used smartphone can be much more affordable than buying new, and selling your old phone can be a great way to get some cash towards a newer model.

But buying and selling phones can involve sketchy dealings that can burn both parties.

An Oshawa, Ont., woman recently ended up with a $45,000 phone bill after she sold her phone on Craigslist while it was still registered to her account. Selling your phone, if not done right, can open you to some of the same risks you face when your phone is stolen.

The risk is even higher for buyers, who can easily end up paying good money for phones that can't connect to a network because they've been blacklisted as stolen, or paying too much for phones that aren't working quite right.

Of course, there are ways to buy and sell your phone while minimizing risks. Here's are some tips for sellers (check back tomorrow for some tips for buyers):

1. If you've sold (or lost) your phone, cancel your service

It sounds obvious, but double check that you don't have phone service. Kelly Arsenault, the woman with the $45,000 phone bill, thought her service was effectively cancelled because her contract expired, but her phone was still working.

"You don't want to hand off your perfectly good working phone," says Marc Choma, vice-president of communications and strategy for the Canadian Wireless Telecommunications Association. "The carrier doesn't know that you've done that. It would still be your responsibility."

Call your carrier and cancel your service, then use your phone to check you can't call anyone.

That applies even if the handing off wasn't voluntary – some people have also received huge bills after their phones were stolen. If you think you might get your lost phone back, you can put a temporary hold on your account.

Arsenault was lucky – her carrier, Telus, decided not to make her pay. But no carrier is obliged to be that nice.

In some cases, you might not want to cancel – such as if you want to switch your service and number to another phone. In that case, follow Tip #2.

2. Before you hand over your phone, erase your data and remove your SIM card

Our phones are full of personal data – emails, contacts, photos and more. You don't want to share all that with the person who buys your phone, so back up your data to another device and do a full factory reset before you sell it.


Before selling your phone, remove any memory cards, including your SIM card, which can contain personal info such as contacts, call logs and text messages.

Remove any memory cards from the phone, including your SIM card, which can contain personal info such as contacts, call logs and text messages.

Your SIM card also connects your account to the phone, so even if you don't cancel your service, removing the card should prevent anyone from racking up a bill under your name.

3. If possible, sell to friends and family

Ask around to see if anyone in your circle needs a phone — it makes for less of a big deal if you somehow forget to erase something from the phone, and getting ripped off isn't as much of a concern.

4. Dealing with businesses can be safer than dealing with strangers on the internet

One of the easiest ways to sell your old phone is to trade it in for credit toward a new one, a service that most wireless providers and some manufacturers such as Samsung and Apple offer.

Granted, that can be a more expensive option, and you may not get as much for your phone as you would if you sell it directly.


One of the easiest way to sell your old phone is to trade it in for credit toward a new one, a service offered by most wireless providers and some manufacturers such as Samsung and Apple. (David Gray/Reuters)

Other options include smaller wireless dealers and specialized online services such as Orchard, a Toronto-based startup that aims to make it easy to buy and sell higher-end smartphones, especially iPhones. The company has a downloadable app that evaluates your phone and offers you a price. If you agree to that, the company sends you instructions and a box to send the phone in, so it can be put up for sale.

Going through a business reduces (but doesn't eliminate) the chance that your phone will be sold with personal information on it, if you forget to erase something.

For example, Orchard sends instructions for people to wipe the phone and remove the SIM card before sending it in. But if the seller forgets, the company will wipe the phone and cut the SIM card in half when it arrives in the office, says co-founder Alex Sebastian.

5. If you're selling to a stranger, meet in a public place

Selling via a site like Kijiji or Craigslist and don't know the buyer? For personal safety, meet in a public place during the daytime when there are people around.

You may want to ask the buyer to bring his or her own SIM card to test that the phone can connect to the network. Or you can use your own SIM card and wait until after the test to remove it, Sebastian says – just don't forget. With some phones, you may also need to bring a special tool to open the SIM card compartment.

A place with public Wi-Fi is also handy for testing the phone.

If you're buying a used phone, rather than selling one, there are even more risks to keep in mind. Check back tomorrow for tips on how to avoid them.