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December 24, 2012

FreedomPop Weasels on Refund Rights

Filed under: Computers,Electronics,Internet — Edgar (aka MrConsumer) @ 5:28 am

In October, a new wireless Internet service popped onto the scene, promising up to 500 megabytes of free 4G data each month, and even a free modem to pull down their service if you paid a fully refundable security deposit of $49 – $89. (See c|net story.)

Two months later, the Internet is buzzing with a variety of troubling complaints.

1. Some users are saying that the company is rounding up data usage to the nearest whole megabyte, when the terms and conditions state they will round up to only the nearest tenth. This might greatly increase usage for checking email every 10 minutes, for example, and could result in overage charges.

*MOUSE PRINT:

“At the end of each broadband session we will calculate your broadband data usage rounded up to the nearest 0.1 megabyte. “

The company denies that it is rounding up data usage. However, their spokesperson admitted to Mouse Print*, “We round on site for display purposes.” After suggesting to the company that this practice could very easily give their customers the impression they are being overcharged, the spokesperson conceded, “that could result in perception we’re overcharging so I’ve raised expanding out a couple decimal places for greater accuracy.”

2. The “fully refundable security deposit” may not be fully refundable. According to some complaints, the company keeps changing its terms and conditions.

The August 2012 terms which were in effect when many people signed up in early October stated:

*MOUSE PRINT:

freedompop

Brief translation: they will refund your money within 90 days after returning the equipment, but they will subtract any money you owe above the free data allowance. They also say if you breach their agreement, they owe you nothing.

Complainants say the company changed the agreement [which the company grants itself the right to do], now imposing a variety of additional conditions and limitations on the “full refund.”

*MOUSE PRINT:

“LEASED EQUIPMENT

From time-to-time, FreedomPop may permit you to lease Equipment from FreedomPop instead of purchasing it. In such case, we may require you to pay a deposit when you place your order for leased Equipment. If we collect a deposit from you and you terminate your subscription to the Broadband Service (or we terminate your subscription other than for your breach of these Terms), we will refund the deposit (less any amounts that you owe to us) to your registered payment method within 90 days after the date on which you return the Equipment to us, on condition that: (a) FreedomPop is still actively providing the same Equipment to users of the Broadband Service; (b) you (or we) terminate your subscription to the Broadband Service within 1 year of the start date of your subscription; and (c) you return all Equipment to us (at your expense) within 30 days of the date on which either: (i) you notify us that you wish to terminate your subscription to the Broadband Service; or (ii) we notify you that we are terminating your subscription to the Broadband Service. For the avoidance of doubt, if we terminate your subscription to the Broadband Service as a result of your breach of these Terms, including without limitation, your use of the Site or Services in a manner not permitted by these Terms, in which case you will, to the extent permitted by applicable law, be deemed to have forfeited your deposit. When returning your Equipment and as a condition of receiving any deposit refund to which you are entitled, you must follow the Equipment Return Procedures below.

To the extent you are entitled to a refund of your deposit, we will deduct from your deposit refund all amounts owed and unpaid for any Services and for any Equipment you return that is damaged due to neglect, misuse, liquid damage or non-standard wear and tear. You will not receive a refund of your deposit if you do not meet all the refund conditions specified in the previous paragraph. Shipping and handling charges are not refundable. Restocking fees may apply. Any amounts withheld by us from your deposit become the property of FreedomPop to use as it wishes. If applicable law requires us to handle deposits, or any other matter relating to Equipment, differently than described in these Terms, we will adjust our procedures accordingly to ensure that we comply with applicable law.” — Nov. 13, 2012 terms [highlighting added]

In short, now they say they will only refund your security deposit within one year and only if they are still issuing the same equipment. They also added a restocking fee.

FreedomPop’s spokesperson defended the company’s actions:

“we do not “continually” update the T&C’s but have updated them two times since launch. … deposits cause a ballooning liability that could bankrupt [the]company … 2, 3 or 10 years from now we can’t get inundated with millions of dollars of refunds and more importantly we don’t carry some $10 million liability on books forever … [with respect to adding a restocking fee:] we have real costs associated with returns from our logistics partner – we can’t eat those.”

The company also said that it is applying the changes only to customers who signed up after the changes were implemented. However, some complaints seem to suggest that the restocking fee was being applied to them despite signing up early for the devices.

3. Some consumers say they decided to contact their credit card company and dispute the equipment deposit because they were having difficulty getting a refund.

FreedomPop, in its latest terms statement (as well as the original) addresses how and where disputes must be filed:

*MOUSE PRINT:

DISPUTED CHARGES

If you think that there has been an error in any charge associated with your FreedomPop Account, you must notify us within 30 days after the date on which the disputed amount has been charged to the your registered payment method. You must submit your payment dispute notification through our online Support feature and one of our advisors will investigate your claim. If you do not notify us within 30 days, and unless otherwise provided by applicable law, you hereby waive any right to dispute the charge in the future, including in arbitration or a court proceeding. If we determine in our sole discretion that the disputed charge was incorrectly charged and was raised by you in a timely manner, we will credit or refund the amount to you. If we credit or refund the disputed charge, you hereby agree that to the fullest extent permitted by applicable law, the dispute is fully and finally resolved and not subject to further proceedings.

CREDIT CARD CHARGEBACKS

If we have charged your registered payment method for a charge that we deem is authorized and valid under these Terms, and your credit card company or other payment provider subsequently withholds or revokes such payment to us because the charge has been disputed by you (a “Chargeback”), we reserve the right to suspend your access to the affected Services until the Chargeback is reversed or in the case of a billing dispute, the billing dispute is resolved as set forth in these Terms.

Brief translation: Customers have to file all disputes with the company within 30 days, or lose any other dispute rights, including even arbitration. And if you file a credit card dispute, the company reserves the right to turn off your service. Ho, ho, ho.

Some people have been very happy with the service, while some other complaints are surfacing. Amongst the not very happy customers are some who pre-ordered a FreedomPop sleeve for their iPhone last April, but still have not received it. On the other hand, some people report that other types of modems are being delivered by FEDEX within a day or two.

For an inside look at the good and bad, read the comments posted on the company’s Facebook page, and the nearly 100 pages of posts in Slickdeals.

• • •

4 Comments

  1. “…2, 3 or 10 years from now we can’t get inundated with millions of dollars of refunds and more importantly we don’t carry some $10 million liability on books forever…”

    I understand that policy like this is meant to avoid piling up charges, but I think the company should be focusing more on making it so that customers do not want a refund rather than minimizing the costs associated with processing refunds.

    I’m thinking this is one of those companies that use deceptive marketing to get as many customers as possible and then makes money based on the number of customers who DON’T become wise enough to the deception to avoid losing money to the company for bad service.

    Comment by Wayne R — December 24, 2012 @ 8:49 am
  2. FreedomPop!!?!?!? I do not see a whole lot of freedom for the users from what you posted except a whole lot of freedom for the company.

    I say skip.

    Comment by Richard Ginn — December 24, 2012 @ 12:38 pm
  3. I wanted to be able to access the internet during my lunch break at work, but we’re so “fire-walled” I can’t access much of anything. I don’t have a smart phone and wanted to access the internet on my wifi iPad.
    I ordered the FreedomPop stick then realized it wouldn’t work with an iPad because there’s no USB port(my bad). After some customer service emails, I returned the stick. I was credited $40.75. I’m okay with that.
    I ordered the FreedomPop photon and the “free” account. Sometimes it’s slow to find a signal, but for my occasional use at work it’s been okay.

    Comment by COhio — December 24, 2012 @ 1:12 pm
  4. It just goes to show, nothing is really free. It is just another nickle and dime operation.

    Comment by Armand — December 27, 2012 @ 2:03 pm

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