iPhone Trade-In Site Cash for iPhones Under Government Probe After Hundreds of Customer Complaints

— -- If you’re in the market to sell an old phone, you may want to do some homework before handing it over to just any company with an appealing offer.

A popular phone trade-in site, Cash for iPhones, offers cash for used phones, but the Federal Trade Commission (FTC) has recorded more than 900 complaints from customers across the country who claim the company offered to pay top dollar for their phones but then actually paid them significantly less.

Francie Taylor, 22, of Chicago is fed up. Cash for iPhones originally quoted her $131 for an old iPhone 5c, but once the company received her phone, it dramatically lowered its quote, she said. The final offer was $11 -- a difference of $120.

As part of the terms and conditions on its website, Cash for iPhones says that customers have three days to dispute their quote over the phone with the company’s purchasing department. So Taylor tried calling for three days straight as "GMA" watched. After being hung up on two days in a row, she finally reached the purchasing department on the third day.

“When you received my phone you quoted me $11,” Taylor said. “Is there any way that I could dispute that?”

It was too late. Cash for iPhones said her old iPhone had already been recycled, even though nine hours remained in her three-day window to dispute her price quote. Many customers have complained to the FTC and said they have had a similar experience when trying to dispute their price quotes. Customers said they were unable to get through to the purchasing department at all or, once they did, it was too late.

To see what the experience would be like, “GMA” Investigates purchased three refurbished iPhones, and ABC News correspondent Linzie Janis asked Dan Ackerman, senior editor at CNET.com, to estimate their market value.

“These look like they’re in fairly good shape,” Ackerman said. “For a new iPhone 6, and this is the 16-gig version, you could probably do [$300], maybe close to $400, if you’re lucky.”

And that quote was just for one iPhone.

“Wow,” Janis said. “How about the iPhone 5s?”

“Now the 5s is a bit older. Probably $150, maybe close to $200, if you’re lucky,” Ackerman said. “And for a 4 or 4s, you know, $50, if you’re lucky.”

For our three refurbished iPhones, Ackerman told ABC News that we could get as much as $600. In general, Ackerman said, the market value for used phones depends on many factors.

“The value can really vary a lot, depending on how new it is, how in demand it is, who makes it. iPhones tend to keep a lot of their resale value for years,” Ackerman said. “Once you get a model or two behind, then it kind of drops off quickly ‘cause people just want the most recent ones.”

On the Cash for iPhones website, Janis plugged in the phones’ information.

“The quote I’m getting for my iPhone 6, 16-gigabyte, from Cash for iPhones is $473,” Janis said. "The quote from my iPhone 4s, just $57 and for my iPhone 5s, $253. So all together I could make up to $783."

The site said that the non-binding quote was pending inspection, so “GMA” Investigates sent in the three iPhones to Cash for iPhones’ warehouse in Sparks, Nevada. Two weeks later, Cash for iPhones emailed the final price quote -- $114 for all three phones.

That’s $669 less than the original quote. The reason for the difference? Cash for iPhones cited the condition of the phones -- although they didn’t give specifics -- as well as “up to the minute market conditions.”