I think everyone has been excited by the idea of getting something for free at one point or another. As a student, I get t-shirts and food at nearly every school-sponsored event. Organizations often use free items to entice you to haul yourself from your dorm and trudge across campus to an Economics Club meeting or fraternity rush event. But as I would come to find out, free things aren’t always truly free.
FreedomPop is a no-contract cell service provider claiming to offer “100% free mobile phone and internet service.” When I ran across it, I was skeptical at best. At worst, I thought the company would charge me a bunch of fees on the back end, and it wouldn’t end up being free at all.
I kept wondering how this could be a viable business model. A few years later, I would find out exactly how FreedomPop manages to stay in business.
My First Encounter With FreedomPop
When I first found FreedomPop in 2014, the service was still in beta stage. In short, the company was still making changes before a full public release. I was happy with my phone service at the time, but my two younger sisters were starting to get older. I figured it was time to connect them with their peers (and parents, for that matter).
So for Christmas in 2014, I made the plunge into FreedomPop. I used the company’s Bring Your Own Phone (BYOP) program because I knew I could find more affordable and robust devices than what FreedomPop offered on its website. (You can find tons of affordable phones online through retailers like Amazon.)
I scoured its list of compatible devices and eventually bought two HTC EVO 3D phones from eBay for $45 each. At the time, the phones were a few years old. Still, they were decent starters for two teenagers who weren’t particularly tech savvy and didn’t have social media accounts yet.
They arrived just in time for Christmas. I went to the FreedomPop site and activated the phones. The costs were clear: $20 upfront as an activation fee to get the service going.
I signed up for a two-week trial of the company’s paid premium service.
In hindsight, the unbelievable part was that as long as you downgraded at any time during the trial, you were eligible for a free plan.
Sounds too good to be true, right?
I obviously didn’t want to pay for a service that’s advertised as free. So as soon as I paid the activation fees and got everything set up, I immediately downgraded to the free plan. This free plan included 500MB of data, 200 voice minutes, and 200 texts per month using Sprint’s network.
How FreedomPop Service Works
FreedomPop’s service is unique in that it doesn’t provide any actual voice minutes or texts. FreedomPop is essentially a wireless VOIP (voice over IP) provider. In other words, the service sends all calls and texts over the internet using cellular data instead of using the cell towers for those services. This helps to provide cheap cell phone service.
However, it also means that you absolutely must download the FreedomPop app to your phone and use that to send and receive calls and texts instead of your phone’s native dialer and messaging apps.
My Sisters’ Experience
Everything was great, and my sisters were happy that they could finally connect with their friends and make plans without having to borrow my mom’s phone. I’m sure our mom was pretty happy about that fact, too.
They stayed on FreedomPop for at least a few months. (I don’t remember the exact timeline, since it was more than four years ago.) Those phones eventually broke down, manifesting in the form of cracked screens and laggard performance. Our mom decided that maybe she’d given her approval on getting them phones a little too early, so I canceled the plans.
Fast-forward to a few weeks ago, when I re-discovered FreedomPop, now in its fully developed, non-Beta glory. Once again, I was intrigued.
I skipped the research process that I normally go through before buying a product.
I naively figured that FreedomPop hadn’t changed much since I first discovered it four years ago. So I went ahead with it — a decision I would later regret.
Last week, the company was running a sale on BYOP kits for just one penny, so I made sure my phone was unlocked (a requirement if you want to bring your own phone to almost any no-contract carrier), and I pulled the trigger. I even paid $10 to upgrade the shipping. That way, I could get the activation kit in time to check out the service and write this FreedomPop review.
The kit arrived at my house two days after ordering. I was eager to set everything up and start my review. I went online to set up my account, opened the activation kit, and put the SIM card in my phone. (A SIM card is what allows your phone to connect to your carrier of choice and contains your phone number. It identifies you as a customer and allows you to keep your same phone number while moving from one phone to another.)
After putting the SIM card in and configuring everything according to the instructions, it seemed I was ready to go.
FreedomPop’s New System
In the company’s latest iteration, FreedomPop has switched to a block pricing method for its premium services. These services include more data, calls, and texts. You purchase service in blocks of three, six, or 12 months. From there, the pricing varies based on how much data you want per month. This structure is not unlike that of Mint Mobile, which I wrote about in my review of cheap cell phones and providers.
FreedomPop has also introduced AT&T as a network partner, allowing the company to reach many more people who may not have had good Sprint coverage in their area, or who didn’t have Sprint-compatible devices.
I was on a free two-week trial of FreedomPop’s premium service, just like years before. And like last time, I could downgrade to the free plan at any time during the trial. After that, I’d be charged for six months of the premium service. The process up until this point seemed the same as before, except this time there was no activation fee, which I loved. FreedomPop had finally made its “free” service truly free.
Or so I thought.
How FreedomPop Makes Its Money
When I went to downgrade my plan, I discovered how FreedomPop was still in business. To be able to downgrade to the free plan, I had to pay $20 into my “top-up” balance. This top-up balance was meant to cover any overages if I went over my free data, call, and text allotment.
What’s more, the default setting is for this top-up balance to automatically refill itself. You must turn it off manually in your online account settings if you don’t want to rack up any unforeseen charges on your attached credit card or PayPal account.
As soon as I saw this, I immediately canceled my FreedomPop account and switched my MetroPCS SIM card back into my phone.
I spent $10 for the rush shipping on the activation kit. The required $20 top-up fee to downgrade to the “free” plan isn’t advertised on FreedomPop’s website. Nor is it anywhere on the activation kit, which advertises “100% free mobile phone and internet service” right on the front in big bold letters and is sold on the website and in major retailers like Best Buy.
It felt like FreedomPop was using questionable marketing tactics to lure customers into paying for service advertised as free. So I reached out to FreedomPop’s press department for comment on this article, and received a response from Jon S.
“I think your assessment is warranted,” he says. “You signed up for a promotion where we offer a two-week trial period allowing users to test before investing. You could also pay $10 for a SIM that is not promotional and select your desired plan, free included.”
Low-income communities like mine would be especially attracted to this service, since we don’t have a lot of money, but we still want a way to stay connected to the world.
But, Jon adds, “to clarify, you do have one false assumption. . . . While you are correct, we are still in business by ensuring all free-plan users have credit. The reason for this is because we almost went out of business due to fraud and abusers. Specifically because of delays in actual data used and reported, we had thousands of bad actors who would take advantage of promotional pricing (e.g. a penny SIM), then downgrade and go over the data before our reporting could catch up. In 2017, abuse almost forced the company into insolvency.”
The required $20 credit acts as a security measure and is refundable, Jon says. It “ensures that we cover the overage. . . . This has nearly eliminated the rampant abuse. Note that last month, over 55 percent of our users did not pay us a penny — literally $0. That’s a lot of people getting free service, which is ultimately our corporate mission.”
This is a big lesson for me. From now on, I know I should read the fine print or be suspicious of getting something for nothing.
“Be skeptical of the word ‘free,’” says Abdullah Al-Bahrani, Ph.D., a tenured professor of economics at Northern Kentucky University. “There is always a cost involved. Sometimes you are paying with the cost of your time. Don’t undervalue your time.”
In this case, I paid with both my time and my money, but I learned a valuable lesson. I certainly won’t sign up for FreedomPop’s services in the future, and I’ll be on the lookout for the hidden costs in “free.”
The opinions expressed in this article are those of the author alone and do not necessarily reflect the official policy or views of CentSai Inc.