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Free Phones with New Service - What It Means
Here at Point.com we feature a lot of deals from carrier-authorized cellular retailers for heavily discounted cell phones with new service plans. It's important for consumers shopping for a new phone to understand what qualifies as "new service."
Misunderstanding the terms and conditions of a wireless deal could result in your having to pay up for that free cell phone after all.
Why are the best deals available only with new service contracts?
Cell phone companies pay their authorized retail agents a large commission for signing up new cell phone users. Those agents then pass those savings on to consumers in the form of big discounts on the cell phones themselves.
The discounts can be very sizable (that free phone you ordered may have cost the dealer $250 or more). Unfortunately, the retailers don't earn such big commissions for renewing a carrier's existing cell phone users, so the big discounts only apply to new customers.
My contract with my carrier is up and I'm now month-to-month. Am I eligible for one of the free cell phone deals from my current service provider?
Generally, no. In that situation it would be considered a "contract extension" -- even if you're willing to recommit to another one- or two-year contract term.
What happens if I order a free cell phone, but I'm not actually a "new" customer?
If you set up a new account using the same name and social security number as your current account, it can raise red flags. If you do this and then cancel another account with similar contact information, most carriers will not consider this a new line of service.
That doesn't mean you won't get the cell phone, but read your agreement carefully. When you place your order, you are usually agreeing to give back the discount if the wireless carrier doesn't consider you to be a new customer. That could result in a charge of up to $250 or the retail price of the cell phone.
If I switch carriers just to take advantage of a free cell phone deal, would that be okay?
Yes. As long as the new cell phone service provider approves your application, you can get the advertised deal, but if you signed a contract with your current carrier, you should always make sure you've fulfilled your obligation on your current rate plan contract, or you may end up paying cancellation fees.
Are returning customers eligible for free cell phone offers?
If you used one cell phone company and then switched to another (or you stopped subscribing to cell phone service altogether), the first cell phone company may consider you to be a new customer when you switch back, but only if sufficient time has passed since you left. The rules for this vary from carrier to carrier, but generally speaking, if it's been more than 3 months since you cancelled service, the carrier will not consider you to be a current customer.
Why was I asked for a deposit when I tried to order a cellular phone advertised as free?
Before the carrier gives its authorized agents a commission, the new customer must pass a credit check. Many applications are approved without any deposit requirement. If the cell phone company decides that you have insufficient credit history, it may still offer you a contract if you put down a good-faith deposit.
I ordered a free cell phone online but now I want to cancel my service. Can I do that?
Read the terms and conditions carefully when you choose your cell phone plan. If you fail to fulfill the deal's requirements, you may incur a penalty both from the cellular carrier with whom you have the contract and the authorized retailer from whom you bought your cell phone. If you cancel your phone service before fulfilling your contract obligation, you may be charged a cancellation fee plus another $250 or more for the phone.
InPhonic's tips on making sure you get your rebate.
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