Home - , , , - Mobile Broadband MVNO Karma To Charge Discontinued Plan Users a Grandfathering Fee

Mobile Broadband MVNO Karma To Charge Discontinued Plan Users a Grandfathering Fee

Karma Refuel Ad
Karma is a mobile broadband MVNO that uses the Sprint network. When Kama launched a couple of years ago it offered a single plan with an unusual feature, data that never expired. There were no monthly charges, users could purchase data for $14/GB and use it as needed over many months or even years as they wanted.  It was a great plan for anyone who only needed data occasionally such as on vacations or at an annual event.

Later Karma launched other plans, included an unlimited plan that crashed and burned rather badly. But they kept the never expiring data plan, which Karma called the REFUEL plan.  Karma finally discontinued REFUEL in December 2016, but told REFUEL users that they were grandfathered and could keep using the plan.

Last week, Karma REFUEL users started getting emails from Karma telling them that they would be charged  a $2.95 monthly "grandfathering fee" starting June 1, 2017. I'm sorry, but that's not how grandfathering works. When other carriers grandfather users of a discontinued plan, it means that users can keep using the plan as it just was before it was grandfathered.

Yesterday, Karma published a blog post saying that users who don't want to pay the grandfathering fee will be allowed to use up any REFUEL data they have left at no charge. However, to do so they will have manually reactivate their account on the Karma web portal after it goes inactive on June 1. Reactivated accounts will stay active as long there is some usage at least every 30 days. After 30 days of non-use the account will become inactive and will have to be re-activated again before it can be used. There's apparently no limit on how many times an account can be reactivated, at least not currently. But given Karma's history of changing the rules, I would not count on being able to keep reactivating a REFUEL account indefinitely. Unless REFUEL users opt in to paying the grandfathering fee before June 1 they will not be able  purchase additional data.

So REFUEL users have two choices:

  • Pay $2.95 per month starting June 1 to continue on REFUEL.
  • Reactivate their account as needed to use up their remaining REFUEL data and then either switch to one of Karma's current plans or leave Karma entirely.

Most of Karma's blog post is a detailed explanation of why Karma is dropping REFUEL. It basically says that Sprint charges Karma for keeping an account active even if there is no use and REFUEL users aren't using the service enough to cover those costs. I'm not sure why Karma didn't anticipate that a plan that had no minimum usage or payment requirement who have users that didn't use it regularly. The REFUEL story reminds me of Karma's $50/month truly unlimited NEVERSTOP plan that Karma shut down three months after it launched because customers were using too much of their "unlimited" data.

Using Karma requires the purchase of a pricey ($100 to $150) proprietary hotspot. Did Karma launch "too good to be true plans" like REFUEL and NONSTOP to trick users in buying the hotspots? Or was Karma management so naive that they thought that customers attracted to an unlimited plan wouldn't use a lot of data; or that customers on a plan with data that doesn't expire wouldn't use data sparingly? I prefer to believe they were naive rather than unscrupulous. But either way its going to be hard for customers to ever trust Karma again.

Sources RedditRepublic Wireless user forum, Karma blog

10 comments:

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  1. $30 US Mobile 10GB data is better.

    ReplyDelete
  2. "14/MB" should be "14/GB"

    ReplyDelete
  3. I was once told by FreedomPop that I was going to be "grandfathered out" of my plan.

    They didn't know what it means either...

    ReplyDelete
    Replies
    1. Your plan must've been getting a forced retirement.

      Delete
  4. Burn 'em once, shame on Karma.

    Burn 'em twice , shame on anyone who didn't see this coming.

    ReplyDelete
  5. Some well needed karma needs to occur with Karma!

    ReplyDelete
    Replies
    1. They're just a plain old Karma Houdini.

      Their customers pay to watch their plans disappear.

      Delete
  6. If this was an honest miscalculation Karma would offer to buy back the overpriced hotspot devices of customers who didnt agree with the new rate plan.

    It sure smells of scam to me.

    ReplyDelete
  7. What I don't understand is why anyone would pay the "grandfather" fee of $2.95 per month for the privilege of buying more data at $14 or $15 per GB* when you could switch to their "Drift" plan and pay $3 per month and get data for $10 per GB.

    *My account shows $15 for 1 GB, $75 for 5 GB and $150 for 10 GB.

    I assume that when the device is deactivated after 30 days of non-usage, that they won't have to pay Sprint a monthly device fee. If that's the case, I can understand that. I got one for a good deal and figure I'd use it in the car or on trips, but since then I've gotten several Freedompop devices and the data on those is free, so I haven't used it much.

    I will stick with the free plan and just activate it when I need it.

    ReplyDelete
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