When Kevin Wood launched a business last year to serve the growing number of foreclosures around the country, the Long Island entrepreneur knew he needed one crucial thing to market his idea nationally: a great phone number.
Wood found what he was looking for in 1-800-FORECLO- SURE. It was direct. It was easy to remember. It was perfect.
Problem was, it was also taken.
A California business was already using it. So Wood did what many others do when they want a particular phone number. He bought it - for several thousand dollars.
Never mind that it's illegal.
In the United States, telephone numbers are considered a public resource, which means they can't be sold, bartered or brokered, according to the Federal Communications Commission and the organization that oversees all numbers used in North America.
But a "gray market" in swapping valuable numbers for thousands - or even millions - of dollars has been going on essentially underground for years.
It was a fairly discreet practice until last month, when an attorney posted an item on eBay to sell his New York number, 867-5309 - a phone number made famous in a 1980s hit song by Tommy Tutone about a girl named Jenny.
By the time Verizon Corp. objected and led eBay to pull the item off its site, the bid was at $80,000.
Phone-number bidding is also much more inconspicuous than the frenzied bidding and "cyber-squatting" several years ago over Web domain names.
"The very strange thing here is that it's the worst-kept secret ever," said Mitch Knisbacher, president of the American Free Trade Association, a trade group of toll-free companies. "Everyone knows it happens.
"The FCC admits that it happens. Phone companies do it. Everyone's doing it. There are people on the Internet who will do it for you. It makes a lot of sense."
AFTA has unsuccessfully petitioned the FCC to relax the rules on number sales for a decade. Although it held a forum on toll-free numbers two years ago, the commission has not budged.
But federal regulations that took effect in November allowing wireless number portability - which lets consumers switch phone carriers and take their wireless number with them as they've long been allowed to for wire-line numbers - could jump-start a niche market for number selling even though such transactions still aren't legal.
Numbers are for life
Portability has made people more aware of the value of their phone numbers, experts said, because a local number can now be held for life, if desired.
"Phone numbers are bought and sold all the time," said Judith Oppenheimer, an industry analyst and president of ICB Toll-Free consultants in New York. "Once numbers became portable, the floodgates opened up."
A flourishing market in phone numbers is evident on line and in court documents.
In a 1992 trademark case that was heard by the U.S. Court of Appeals, DaimlerChrysler and Mercedes Benz USA sued the owner of a Minnesota dealership for trademark infringement after the giant automaker spent four years trying to buy 1-800- MERCEDES from him.
Mercedes lost the case.
More recently, a vanity number with the Beverly Hills 310 area code sold for $349.99 on eBay. Last week, 36 people bid on 1-800-GREATRATE, closing the online auction at $8,600. This week, 1-800-JESUS5 is up for sale.
eBay has stated that it will not allow the sale of numbers on its Web site, but numbers can be listed if they're attached to a legitimate business being sold.
Mark Russell figured he was just skirting the edges of the rules.
His business is built solely on the toll-free number 1-800- GREATRATE. He makes money by renting it to other companies, typically lenders, around the country for a monthly fee. The practice, called shared usage, is legal.
Calls made to the 800 number are routed automatically from Russell's line to companies that rent that number in a specific region.
"The business revolves around the actual number," Russell said of the auction. "I've had it almost a year and it's making about $32,000 a year for me. I'm getting rid of this number to get out of debt."
Numbers aren't just a facilitator for communications. A good toll-free number can also provide a business with brand recognition, instant credibility and broad customer reach, Oppenheimer says. Think 1-800-CALL- ATT or 1-800-FLOWERS, or on a local level, 410-487-SECU for the State Employees Credit Union.
In other countries, landing a lucrative number can make headlines.
Last year, Sichuan Airlines paid $280,000 in a charity auction for the number 88888888 because eight, a homonym in Chinese for rich, is considered lucky in China. Two years ago, three wealthy businessmen paid Saudi Telecom between $40,000 and $81,000 for four mobile numbers made up of the same digits.
And in Australia, valuable numbers are auctioned off on-line by the government in a bid to raise extra revenue.
Danger of hoarding