Terms & Conditions: Freedompop will nickel and dime you – but it’s still a good deal

Terms and Conditions FreedomPop

Last week, wireless and home Internet provider Freedompop officially announced its “free” smartphone service. Freedompop customers must purchase a refurbished HTC EVO 4G (with Samsung and LG phones expected on the lineup later) for $99 or $199, with no contract required, to use the service. The company then gives customers 500MB of data per month, 200 anytime minutes of calls, free calls to other Freedompop users, and unlimited text messages – all for “free.”

Of course, the story doesn’t stop there, with hidden costs and stipulations aplenty (though the service is still likely cheaper than whatever you’re paying for Verizon or AT&T service). Because pricing is such an important part of what Freedompop is, we’ll be going through both the company’s “payment terms” rather than its standard terms of service to see just how good – or terrible – a deal Freedompop really is.

Service Plan, Equipment and Payment Terms

Busting out

Ok, so 500MB of 4G data and 200 calling minutes isn’t going to get you very far, unless you use your phone once a week and rarely use and apps or the Web. That means you’ll have to upgrade to one of Freedompop’s two prepaid plans.

The “Casual” plan – which the company says gives you “4X the FREE data” on its signup page – actually only gives you one month of extra data for free. The real cost is $18 per month for 2GB of data, which really isn’t a bad deal considering the same thing will cost you $60 through Verizon (with unlimited texting, which you already have).

“Premium” plan customers can up their data availability to 4GB per month for $29, which is still a good deal – just not quite as good as “free.”

You can also choose to add unlimited calling for $10 per month – which, again, is a great deal compared to what other wireless service providers offer.

Speed boost

On top of what you’ll pay for the data itself, Freedompop also charges $4 per month to have access to the fastest available service. If you’re a “casual” customer with unlimited calling and a speed boost, your monthly cost jumps to $32 per month. My current plan with Verizon offers me roughly the same service – and it costs $100 per month. Winner: Freedompop.

Month-to-month is for suckers (or something)

Freedompop advertises itself as a prepaid service provider, which is true. But a quick look at the payment terms shows that you’d do best to sign up for an “extended term plan” instead of a “month-to-month plan.” In this case, “extended term” can mean two years (though it may differ for some customers), and agreeing to use the service for that amount of time gives you “more favorable pricing.

The bad news is that, like regular contract wireless plans, signing up for an “extended term” plan means you’ll have to pay a termination fee (price undisclosed in the payment terms) if you cancel your service before your term has expired.

Update: Freedompop explains in the comments below that, while the company’s terms do include a section on “extended term plans,” the company does “not actually have any contracts.” For anyone who bothers to read through the company’s payment terms, this could prove a bit confusing. I’ve asked Freedompop for an explanation as to why they include the “extended term” provision at all, and will update this space once I hear back.

Update 2: Freedompop explains that “The extended terms portion of our T&Cs is there for something we may be offering in the future. It’s a possible way for us to offer even deeper discounts to our users.” 

Prepaid for all

No mater which kind of service you get from Freedompop, all of it is “prepaid” – as in, you must pay at the beginning of each month. If for some reason you fail to pay, your service will be suspended (duh).

Over the limit

If you surpass your data allotment, Freedompop will charge you on a per-megabyte basis, which is either $0.01 or $0.02 for each megabyte you use over your data budget. That equals out to $10 or $20 per gigabyte, depending on your plan. Also, keep in mind that Freedom pop rounds up on all of its data. As the company writes in its payment terms, “if your actual data usage is 1.32 megabytes, you will be charged for 1.4 megabytes of data usage.”

Top me off

Freedompop will automatically charge you an “Automatic Top-Up” amount as soon as you get within 100MB of your allotted data budget. This amount is set at $10 by default, but you can boost that amount higher to get more additional data, if you so choose, by changing the settings in you “My Account” feature. According to Freedompop, you will also receive an email anytime you are about to be charged for an Automatic Top-Up.

Pay for nothing

One potentially troubling provision in the “payment terms” says that, if you use less than 5MB per month of data, then you will be charged a $0.99 “Active Status” fee. That is to say, you will be charged month for not using your Freedompop data, which seems absolutely absurd. (The company claims it charges you this fee “to keep your account active,” thus the confusing name. However, Freedompop tells Time that it has started to waive this fee for new customers, and will stop charging existing customers this fee. Good – it should never have done so in the first place.

Friends with benefits

Freedompop will give you 10MB 50MB of additional free data for every friend you get to sign up for the service, up to an additional 500MB. Furthermore, you can get more free data by completing certain promotional offers, like surveys. For some, that might be great. Others might be annoyed by the advertising factor inherent in their wireless service.

Terms of Service

Freedompop’s standard terms of service are just that – standard. But there is one important thing to know about Freedompop’s standard terms: The company forbids you from doing anything illegal, from saying anything nasty to other people, or even from using “explicit/obscene language or solicit/ post sexually explicit images” through its service. Do any of that – and I know a whole lot of you do a whole lot of all that – and Freedompop could cancel your service at anytime.

Furthermore, if it finds out you are doing anything illegal, the company promises to “cooperate with law enforcement agencies and its third party service providers in any investigation of alleged illegal activity.” In other words, Freedompop will rat you out.

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.

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