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What is a Free Line Rental Deal?
A free line rental deal is an incentivised offer made by mobile phone retailers to their customers. It is not an offer made by the network provider. It is very important to understand this.
With a free line rental deal the retailer offers customers the opportunity to claim cash back by redemption over the course of the contract. Typically claims need to be made in months six nine and eleven, but this varies between retailers.
If all cash is claimed back on time, within the terms of the agreement, then, the cash refunded will cover 100% of the total cost of the contract, and are thus described as “free line rental” deals.
This means that for the first portion of the contract you must pay your bill as normal. Again this is why it is important to understand that these deals are an arrangement between yourself and the store where you purchased the phone and are nothing to do with the network providers themselves. The network provider still expects to be paid on time every month!
A free line rental deal is only free if you correctly make your claim for cash back. If you fail to do this then you will have to pay the full amount for the contract as normal.
Are Free Line Rental Deals Genuine?
Yes they are genuine as per the terms of the agreement, if they were not then they would be illegal! I personally know people who have used these deals successfully for years. Whether they should be described as free line rental deals is another matter, as it is not guaranteed that you will receive your cash back. The onus is on you the customer to make the claim. Only if you do this will the deal actually be free.
How Do These Deals Work?
As mentioned, you have to order your mobile phone and pay the bill as normal. When you order your phone you will be given a contract with instructions on how and when to make your claim. It is important you read, understand and keep this contract!
Typically you will not only need to make the claim on specific dates, but you will also need to provide some documentation which may be either:
Now, you may well ask why they need copies of your bill when you have already signed the contract, and the money is being paid to the network providers? Well, I don’t know if there is a genuine reason or not, but, if I were being cynical I would say it is because you may lose them! Read on and I will explain!
How Do Retailers Make Money From These Deals?
If you make a successful claim they don’t, they lose money! Think about it, retailers are only paid a commission from the network provider. The network provider has to make a profit on top of the commission paid. So, the commission paid will be less than 100% of the value of the contract. So, if the retailer subsequently has to refund 100% of the cost of the contract they are going to make a loss.
The only way retailers make money on these deals is if a significant number of customers fail to make their claim, so they introduce a number of “tasks” you must perform in order to get your money back:
By using the above methods (and possibly more I have not yet seen) the retailers are able to reduce the number of successful claims to the point where they are able to make a profit. For the majority of customers, this means paying the full price. For the steadfast minority who are pedantic in making their claim on time and to the letter this means… getting a completely cost free mobile phone!
Is a Free Line Rental Deal for You?
If you can answer yest to the above, particularly the second point, then you may make a free line rental deal work for you. If on the other hand you are the kind of person that loses paperwork, forgets dates and cannot be bothered to read the small print, they you should consider an Instant Cashback deal instead (see link at top of page).
Are There any Other Risks Associated With This Kind of Deal?>
Yes, a big one! If the retailer go’s out of business you will more than likely lose your money, and, this happened quite recently. One retailer got the terms of the contract wrong, I suppose they made it too easy to get the money back. They lost money, went out of business and left a lot of people out of pocket. Look for established retailers that have been running these deals for some time, and check their history (how long they have been in business). Most companies are reputable and you should not have a problem finding a reliable free line rental company.
Who Can I go to if the Company Go’s Bust?
Your only recourse is via the administrators winding up the company. Get yourself listed as a creditor and see if you get any money back.
Wont The Network Providers Help if the Retailer Go’s Bust
Not on your nelly! I keep stressing, these deals are between you and the retailer. They may be described as free line rental deals, but the networks still want their money, and you will have a binding agreement with them.
Are 12 Month Free Line Rental offers The Only Kind?
No you can also get 18 month free line rental deals, but these are not as popular as the 12 month. You can also find deals advertised as 6 or 8 months free. These are all cash back incentive offers and all work in a similar way. The difference is really in the quality of the handset you get. The cheaper the handset, and the more minutes you order, the closer to a 12 month free deal you will get.
In a Nutshell, Heres The Deal!
For years mobile retailers gave away free handsets as an incetive to take out contracts via their company. Some users decided that they did not actually want a flash handset, instead wanting cheaper monthly rental fees. These fees are fixed by the network provider, largely non negotiable. So, the retailers engineered this “free line rental” system. They said
OK… take a cheaper handset and we pay you back the saving which will contribute to the monthly cost”.
So, what you end up with is something like this:
1) You sign up with and pay the network provider
2) The retailer gets paid their commission from the network
3) You claim your cash back
4) The retailer pays you your cash back (if you claim correctly, and if they are still around!)
So, Are These Deals Legit?
As the saying go’s, if something is too good to be true, it probably is! That is the case with these deals, however, that does not make them a bad idea. As I have already mentioned, I know several people who have been using these deals for years and have made big savings, so, do not be put off! Most companies have been in business for years and are not going to go bust. All you really need concern yourself with are the specifics of the contract, and whether you think you can make a successful claim!