Electronics

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FreedomPop Weasels on Refund Rights

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.

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Refusing to Make Repairs Under a Service Contract

Marie W. bought a front loading GE washer and dryer back in 2008 for over $2100. Just before her first year of ownership was up, she got a letter from GE offering her a four-year service contract for $298. She decided to buy it.

One of the inserts she received for GE Service Protection Plus (from Federal Warranty Service Corporation) promised “unlimited service calls” and “you pay nothing for repairs to operating components that fail during normal residential use throughout the life of your contract.”

Good thing she bought it because she needed two repairs in the past few years. Then recently she heard a loud banging sound and called for service. The repair guy came, diagnosed the problem, and called in the repair telling them what was needed. The service company responded that it would cost too much to make the repair, as the washer was now only worth $589. They said all they would do is pay her that amount instead of fixing the machine. The repair would supposedly cost $1300.

Marie was in shock because she thought she had purchased peace of mind and would not have to worry about repair bills until 2013. She was told to look at section 9 of her contract and see that the service company was within its rights to refuse repairs. Could that really be?

MrConsumer got a copy of the contract, which said in relevant part:

*MOUSE PRINT:

“Administrator, in its sole discretion, will determine if Your Product is “non-repairable.” If it is, your remedy is to select a GE PRODUCT or a MONETARY credit from one of the schedules below.” [GE product credit is 84% of original purchase price for a four year old appliance, and a monetary credit toward a non-GE appliance is 74%.]

” ‘Non-repairable’ Product is a Product that Administrator determines cannot feasibly be repaired based on commercial and technical considerations including, but not limited to: age of Product, repair cost, number of times the Product has been repaired or attempted to be repaired, physical access, or parts not available in GE’s parts warehouse….”

“… liability of the … Administrator… shall not exceed the purchase price of a comparable replacement Product…”

While the fine print in the contract tends to uphold the servicing company’s actions, the current value of a consumer’s washer is not explicitly part of the computation to judge non-repairability and may not be calculated correctly. The company’s actions also are at odds with their advertising claims of the consumer not having to worry about repair costs during the term of the contract.

After some back and forth with the servicing company, they upped their offer to $679, still refusing to make the repair. MrConsumer advised Marie to file a complaint with the Attorney General’s office to see if they could negotiate an even better deal for her.

But the lesson here is to read any service contract you plan to buy before you buy it, and see if it includes the right of the servicer to refuse repairs or to cap its liability.

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Vonage: Unlimited International Calls?

Telephone and cell companies have popularized “unlimited” calling plans, and customers love them. There is no watching the clock, and checking the number of minutes used.

One company that advertised unlimited calling is Vonage — the leading voice over Internet protocol (VoIP) company. Part of a commercial they ran in the past said:

The fine print is inconsequential for purposes of this story, but refers in part to the fact the only certain countries were included, and maybe not to cell phones in all countries.

Vonage’s website confirms that calling is unlimited to 60 countries:

Lo and behold, the company sent this letter to one customer claiming that he used too many minutes on his unlimited plan.

Dear XXXXX XXXXXXXX,,

We appreciate your business and thank you for using Vonage for your phone service.

In order to provide the best value to all our customers, we track usage of Vonage residential calling plans. At the time of signup, you agreed to the Vonage Terms of Service (TOS), which includes usage guidelines for normal residential use. If you would like to review the usage guidelines, please see sections 5 and 10 of the TOS.

We have observed usage on your account, 1234567890 , which is not consistent with normal residential use. Specifically, your account shows irregular patterns of use and/or international-minute usage that is more than twice that of our heaviest users.

At this time, you can remain on your current plan, but your usage will need to be changed to fall within normal residential use guidelines; this usage would generally not exceed 3,000 international minutes per month. [emphasis added] As another option, you can switch to a different calling plan, or you can disconnect your service without penalty.

For additional information about your options please respond to this email and one of our associates will be glad to assist you.

Regards,
Vonage Customer Service
101

When at Vonage’s terms of service, one learns

*MOUSE PRINT*

5.4 Inconsistent with Normal Use.
If you use the service, any feature or the device in a way that is inconsistent with the normal use for your service, feature or plan, you will be required, at Vonage’s sole discretion, to pay the rates for the service, feature or plan that would apply to the way you used the service, feature or device, or terminate the plan. For example, if you subscribe to one of our residential service plans, and your usage is inconsistent with normal residential use, you may thereafter be required to pay our applicable, higher rates for commercial service for all periods in which your use of our service or the device was inconsistent with normal residential use. Unlimited voice services are provided primarily for continuous live dialog between two individuals. Lack of continuous dialog activity, unusual call patterns, excessive conferencing or call forwarding, excessive numbers and/or consistent excessive usage (which may also apply to features such as Directory Assistance) will be considered indicators that use may be inconsistent with normal use, or that impermissible use may be occurring and may trigger an account review or further action by us. We may determine inconsistent use based on material deviations from the usage patterns and levels of most of our customers using the same and/or similar service plans, features or devices

In summary, they say if your use is inconsistent with normal residential use, they can charge you commercial rates, put you in a higher priced plan, or terminate your service. Nowhere do they establish a specific cap of 3000 international minutes.

If you think about it, 3000 minutes a month is only 100 minutes a day — just over an hour and a half of calling. I could easily imagine someone with loved ones overseas talking that amount of time.

This is yet another example of companies that like to advertise “unlimited” services of one kind or another, but in fact they do have limits that are not clearly stated upfront.