Friday, March 03, 2006

The End of FreePay - ToS Changes Limit User's Ability to get Prizes

FreePay (formally known as Gratis), a company that offers to give away free gifts to individuals who sign up for a unique matrix type of offer, has changed their terms of service to limit the ability for it's users to receive gifts. The new terms of service force users to complete all the requirements within 90 days of first signing up, then wait another 30 days to fill out a form that must be mailed in to them to be verified. Previously, a person could sign up and take as long as they like to finish the requirements to get the free gifts.

The site works through a referral system where an individual signs up to the site and then they must complete an offer and then sign up a certain number of other people under them and also complete an offer to qualify to receive the free gifts. The offers are normally trial offers for things such as DVD rental services, dietary supplements, credit cards, phone offers, and etc. Freepay makes money when a user signs up for one of these offers and they are in turn paid a commission by the company.

Some people would consider this to be a pyramid scheme, but it technically isn't. This is because once you finish your requirements you are no longer obligated to do anything else with the web site. Where as a typical pyramid can go on forever, keeping people signed up in downlines that continue in a pyramid type fashion, matrix type sites work by only allowing the individual who signed up under the original referrer to be included in the first downline. For example, Jane signs up for, then Jane asks her friend Joe to sign up under her. Jane completes her offer and then Joe completes his. Now, Jane needs 9 more people to sign up under her and complete an offer ("go green") to get the Mini Mac. Joe needs 10 people to sign up under him and go green so he can get the Mini Mac. Anyone who signs up under Joe will only go towards Joe's credit for the Mini Mac, and not Janes.

Because the amount of commissions that FreePay earns when people sign up under people is going to be less than how much the gift is worth they lose money when someone completes their obligations to receive the gift. In order for Freepay to stay in profit and not lose money they count on people not being able to sign up enough people under them and give up on signing up people under them. Using the example above, if Jane can only get 5 people to sign up under her to get her Mini Mac and gives up, then FreePay will have made money off Jane and the 5 people who signed up under her, and doesn't have to send out the gift. However, matrix programs, similar to pyramid programs only work if they continue to sign up new members who keep infusing the system with cash and don't have to pay out as much when people give up. In both setups, the bottom can fall out if the company is paying out more than they are taking in and that seems to be what has finally happened to FreePay.

FreePay has always been seen as the staple of the free sites as they have usually had the lowest amount of complaints and have continued to ship out prizes when other sites have fallen apart quickly. They have also maintained a good selection of offers for users to complete that aren't extremely expensive or not interesting as some sites have done. Unfortunately with these new changes in the terms, users will be limited to being able to complete the sites as they only have 3 months to find the specific numbers of people to sign up under them and complete an offer. This extreme move by FreePay is seen as an obvious sign of their downfall and has caused many people in the free site community to think twice about starting their sites.

Important Change to Terms & Conditions

This email concerns an important change to the Terms & Conditions for [SiteAddress].

* With a start date of March 1, 2006 – users of FreePay websites have 90 days to complete all offer requirements.
* Upon completion of all offer requirements, existing users will need to print a "Redemption Form" that must be filled out in its entirety and mailed with a postmarked date no later than 30 days of completing their offer requirements.

You will find an indication of how many days you have left to complete the requirements on the Status page. When you have completed the requirements you will be able to download the redemption form from the Status page.

To coincide with this change, look out for an update soon that will make it even easier to refer friends!

Best wishes

- The FreePay Team
FreePay has stated in the past that there is a great deal of fraud on their sites by users using dubious means to complete the sites and get their free prizes. More likely, the problem is that there are groups of "professional" traders on communities like and ReferralSwapper that work hard and strive to complete the sites easily and as fast as possible. Professional trading has been citied in the past from site owners, such as the fallen Coobro sites, as the reason for having to shut down and suspend operations. has downgraded FreePay to a grade "C" site and many users are trying to figure out what to do. I am currently trying to finish two sites (although I had been planning to eventually try and complete all of their sites), (5 refs needed) and (3 refs needed). Most likely, I will have to pay people to sign up under me so I can complete the sites, which in my opinion, defeats the entire idea of a "free" offer site.

UPDATE: 10/12/06 - FreePay finally sent me my iPod Nano and Mac Mini that I had been owed since back in May. Although it took a long time, I never had to contact the BBB like many other members had. I will not be doing anymore FreePay sites, although I have a few other free sites I may try and complete.

Because of this action by FreePay, I have started a petition for people to sign which I will send to FreePay and ask them to reconsider this change in policy, or at least reimburse users for their referrals that they have and were unable to complete. Although this action might not be successful, it is the only action I can think of that could possibly influence FreePay to change their minds.


I, like many FreePay users, have worked long and hard, spend many hours and money trying to complete these sites and promote FreePay to our friends, family, coworkers, and total strangers. We should not be treated this way, and as veterans of FreePay/Gratis and other free sites, we should band together to try and stop this unfair action. Even if you don't think the petition will help, please sign it anyway. By being proactive we can at least say we tried to fight against these changes.

The contact information contained in the petition was taken from the BBB report on Gratis and their domain registration information. If anyone has any other contact information please post it in a comment or contact me with it so I can update it with more current or valid data. Their domain registration information is:

Gratis Internet
Domain Administrator
PO Box 50945
Washington DC, DC 20091
Phone: (202) 595-9123
Fax..: 202.478.0817
I also encourage you to send letters, emails and faxes to FreePay/Gratis and let them know your disapproval about their new terms. If you receive any replies, please post them in the comments.

Stay tuned for updates.


I have posted the link to the petition on several forums which has started some very heated discussions. Here they are: Discussion
FreeiPodGuide Forums Discussion (with comments from Jake, FreePay rep)
ReferralSwapper Discussion
Gear Live Discussion

Many people have openly flammed me for attempting to try and create a solution to this problem. This is very discouraging to me after I feel like I am not just trying to help myself, but the free site community in general. If anyone has any words of encouragement, I welcome them. Right now I feel like I need a Valium...

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