How Free VPNs Make Money? Scary Facts to Know

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How free VPNs make money

1. Sales of user data

We start the list with probably the scariest thing VPNs do to make money from their users, and that’s selling the information and data their customers provide them. This is without a doubt one of the most dangerous things a free VPN can do, as it directly affects their customer’s privacy and places users at potential security breaches.

So, how and where can a free VPN service sell your data? Well, by the data of some VPNs that were actually caught doing this, there’s a number of ways VPNs go about it. To do this in simple terms, they mine the data from the user’s device and create separate files for each person. This amount of data and personal information that they can potentially mine from a device is really troubling.

Based on your devices information and location information, all the way to personal information, emails, messages, phone numbers and basically everything stored in your device’s memory. Some VPNs have even managed to gain full control over their user’s devices, giving them full and unlimited access, including opportunities to edit, modify, and even remove media from the controlled device.

In some cases, VPNs sell their users emails to third-party companies. This is a huge problem for you as a user, because you not only get a ton of spam and unwanted emails, you also never know how many people and companies have your email address. Ransomware, cryptojacking and phishing emails are just some of the possible consequences of the VPN mishandling your email.

This sounds too scary to be true, so the biggest question to come up of all this is – shouldn’t it be illegal? Well, unfortunately, most free VPN users don’t go over the privacy policy before you up to a new service. It means that as long as a VPN declares that it can share your information in any form and you agree to it, it’s not illegal. It’s certainly not ethical and moral, but unfortunately it’s a loophole that many free VPNs know how to take advantage of it.

2. Personal data-based marketing

In line with the first thing we talked about, openly sharing data for marketing purposes is another very dangerous practice that some free VPNs allow themselves. The reasoning behind this is, of course, quite understandable. Because they don’t make money from user subscriptions, they offset their losses by making money in different ways. There are a few different ways a VPN can share their customers’ data for marketing purposes.

The first is that they directly use your data and information for marketing and advertising purposes. It means that every time you log in or look up something online that interests you, the VPN stores this information and uses it to determine which ads should be sold to you and how to do it most efficiently. The second way they do it is that they openly share this data with outside companies and their partners. This is the more dangerous option of the two, because the VPN and the marketing company are basically integrated into one platform and both have full control over your data. It’s so dangerous because the marketing company often links ads from websites and pages that aren’t reliable sources. These ads are not only frustrating, but can also lead you to malicious sites.

There are many examples of this, but probably none better than Betternet, which is a free VPN service that publicly and openly declares their ties to online marketing companies. They don’t hide the fact that they have an ad-oriented business model. However, they don’t go into much detail to reveal their location, business information, and important details about how this ad-oriented business model works behind the scenes.

The only benefit of this problem is that it is a really good way to assess how reliable a free VPN is. To put it in different words, if you notice that your VPN is aggressively bombarding you with ads, it’s a telltale sign that they’re most likely to share your personal information and activity with third-party websites.

3. The exploitation of free users for the benefit of the paying

In addition to selling your personal information to third parties, free VPNs can leverage your trust in a variety of ways, with the most prominent being for the benefit of their paying customers. This is a problem that arises when a VPN works simultaneously as a free service and a paid one. It’s because the VPN then works separately on two completely different levels. They give you, the free user, a single imess to the Internet without any conditions, but also at the same time, they exploit your connection in different ways.

The best examples of this underhanded technique are the VPNs that use the free user’s processing power and transfer it to their paying customers. This essentially means that the VPN is selling your bandwidth to other users for profit. Of course you avoid this by opting for a paid membership if the VPN offers one. The only catch is that there are VPNs that don’t share this information with their free users, so you don’t know if your device and connection are being used to promote someone else’s benefits.

4. Create BotNets and Exit nodes

If the previous tactic that VPNs use wasn’t scary enough, it comes with some real-world consequences that can get you into a lot of trouble with the law. While some VPN users may not have a problem with this kind of service exchange, it can give them a significant headache on the road. If a server exit node means that all the traffic that goes to the end node server is shown as having come from the IP address of that server.

This can get you into a lot of trouble, because the traffic that goes through can include all kinds of illegal activities, searches and browsing history. It’s certainly not worth the risk, especially when you consider that you’re taking up all responsibility without any compensation, while the VPN service earns money from all their paying members who use your connection and IP address as an exit node.

There have been recorded cases where innocent people were investigated by the government for carrying out illegal activities over the Internet. All this happened because the VPN they thought they were using for free used their network and IP address to create a botnet that allowed other users to connect to their IP address. In addition, hackers managed to take control of all the free accounts in the VPNs’ network and create a large botnet they could use for anonymous malware attacks. While all this sounds like a plot from a thriller movie, this was a real-life case that happened to Hola VPN users.

Although the Hola VPN scandal was a big landmark that helped shed light on the danger of using free VPNs, there are still free VPNs that do this. The frightening part in all this is that there are currently no procedures or measures put in place to monitor how these VPNs exploit the trust of their users.

5. Track user activity

Last, but definitely not least, the most common offense that free VPNs create and one that many of their users (un)voluntarily agree with is tracking their members’ online activities. There are many VPNs that keep connection logs. This is primarily to keep their service running without any hiccups and to ensure that the networks are secure and encrypted. However, connection logs can also be used to track a particular user’s habits and interests.

They do this in different ways. Usually it is by inserting browser cookies. These tools can track all your online activities without you usually being aware of them. The other two ways to track your online activities are web beacons and tracking pixels. Web beacons, also called web bugs, are more common than you think. It’s those recognizable clear photo files that are used to track your activity on the Internet. Tracking pixels work in the same way as web beacons, but are different in appearance. They are more useful for analyzing data and tracking users’ online behavior. Not only does the VPN use these tools to track your activities, but in some cases they also allow their marketing partners to do so.

So, while you think you’re anonymous and private while using the VPN services, your online activities are actually tracked at all times. While most VPNs won’t admit this, they collect your data and all your activity data and bewareusually for the highest bidder. Unlike free VPNs, you have to pay for usually list everything in their privacy policy, which means that when you pay for a service, you actually check if you’re getting what you promised.

Using a VPN that tracks your online activity defeats the purpose of using the VPN at all. Instead of your Internet Service Provider being able to track your activity, you give this power to the free VPN, which is a very dangerous thing to do because you never see if their intentions are good or bad. If a free VPN is located in one of the 14-eyes countries, it also means that they are required to share one of the information that the government of the country in which they are in asks them. This is a risky position to put yourself in as once again, you are the only one who up responsibility if something goes bad.

Why do free VPNs use such tactics?

For some VPNs out there, making money comes for their user’s security and privacy. Selling user data, using it for advertising or blatantly violating their security and privacy are just some of the ways free VPNs make money. But before we go into the details, it’s important to talk about all the important aspects and understand why some free VPNs abuse their customers’ trust. Here are the biggest reasons they do this:

High maintenance costs

As we said at the beginning, it’s easy to forget that running a VPN network costs money. Depending on the size of the VPN customer base, the monthly cost of maintenance can easily be up tens of thousands of dollars. Not to mention, as the VPN grows and needs more stable and powerful servers, these costs can climb up hundreds of thousands or even millions. That’s why server fees are probably the biggest reason why most free VPNs decide to go behind their customer’s back.

Financial gain

Of course, breaking even doesn’t sound as good as making money. That’s why some VPNs decide to go a step further and use their customers’ data in certain ways that allow them to make more money. This typically includes selling or sharing data with third parties or creating heavily targeted ads that generate more profit for advertisers.


Although some people may argue that the first reason is justified, and even the second, no one could excuse acts that come from sheer greed. When you have confidential data from tens, even hundreds of millions of users, it becomes very tempting to use all this knowledge and power. Many popular free VPNs have succumbed to this, taking hola, Betternet and even Opera VPN a time to monetize their users’ data.

Why you should choose a paid VPN service

Free VPN services cannot be compared to services that come with a price tag. They offer a certain level of security and privacy guarantee that simply cannot be respected by a free VPN. With larger budgets and well-defined business models, paid VPNs simply offer a service that free VPNs can’t match. Benefits of using a paid VPN include:

  • Better connection speeds – Free VPNs often limit internet speeds of their free users to the benefit of their paying customers. With a paid VPN service you enjoy improved Internet speeds and even enjoy bandwidth restriction from your ISP. Connection drops are much rarer, and you won’t suffer from problems for free that VPNs with lower quality suffer from.
  • Clear Privacy Policy – As we’ve said before, free VPNs are often secretive and not very honest when it comes to sharing their business model with their free customers. When you pay for a VPN, you know what you’re getting and how private you are when you’re connected to a VPN server.
  • The diversity of servers – The number of servers comes hand in hand with internet speed. The more servers a VPN has, the less crowded they will be, which means faster connections. In addition, if you use a VPN to access geo-restricted or blocked content from another part of the world, you simply connect to a server closest to the desired location and have unlimited access to yourno matter where you are.
  • Security – Paid VPNs can come with a number of additional features attached to them. This includes various encryption protocols, special features like the kill switch, better and stronger encryption. When you pay for a VPN service, you should settle for no less than industry standard 256-bit encryption.
  • Customer support – Same as all of the benefits mentioned above, good support comes at a certain cost. This doesn’t mean you have to pay too much for your VPN service. It just means that if it happens that you’re facing a problem using a VPN, you expect someone to be on standby and help you when you need help.

Top 3 Premium VPNs

With all this being said, keep in mind that not all paid VPNs are good or come without flaws. It’s always best to do a little research before opting for a VPN. To help you choose the most suitable VPN for your needs, we’ll bring you the top 3 premium VPNs currently available.

#1. ExpressVPN


ExpressVPN is widely considered the best all-round VPN. It comes at a bit steeper price compared to the competition, but the service you get in return is more than worth the cost. ExpressVPN is probably the most convenient VPN currently available because it’s easy to set up up and is available on any device. They have a pretty impressive server network with over 3000 fast servers in 94 countries and 160 locations. Speaking of high speed, ExpressVPN speeds are among the best around if you are guaranteed maximum efficiency when connected to one of their servers. You expect speeds to range between 80Mbps and 85Mbps on a 100Mbps network.

  • Fastest speeds among all other VPN providers
  • No logs
  • OpenVPN, IPSec & IKEv2
  • Torrents / P2P allowed
  • Unblocks Netflix, Hulu, BBC iPlayer
  • 24×7 Live chat support
  • 30-day money-back guarantee

Read my ExpressVPN review

Check expressvpn prices

#2. IPVanish

ipvanishCome second. IPVanish is perfect for people who often download files and content from the Internet. It offers good and stable download speeds, with unlimited bandwidth and unlimited P2P traffic. With servers in more than 75 locations worldwide, absolutely zero traffic logs and Unlimited simultaneous connections/devices, IPVanish is a really useful VPN. While the interface may not be as easy to use as ExpressVPN’s, it offers a lot of customizability, which will certainly impress more experienced VPN users looking for a new VPN.

  • Good speeds
  • No logs
  • AES-256 Encryption
  • P2P allowed
  • 30-day money-back guarantee

Read my IPVanish review

Check IPVanish prices

#3. NordVPN

nordvpnIf you go for the best combination of quality and quantity, NordVPN is the way to go. With the lowest membership price and a 30-day risk-free guarantee, NordVPN is a risk-free option for any privacy enthusiast on a budget. NordVPN is not only very affordable, but also has a strong punch. With more than 5,200 servers in 62 countries around the world, they offer the largest server network of all VPNs. Their military grade dual encryption and no logs policy make them an ideal option for browsing, streaming and downloading content.

  • Good speeds
  • No logs
  • OpenVPN, IPSec & IKEv2
  • P2P allowed
  • Unblocks Netflix unblocks
  • 30-day money-back guarantee

Check NordVPN prices

Final Words

While the Internet can sometimes be a scary place, with a few extra steps you are unlimited and securely accessible, and it all starts with getting a reliable VPN. If you really value your online privacy and security, don’t settle for a free VPN service. There are plenty of choices available out there, starting with just a few dollars a month. We end it with a phrase that you should always keep in mind, not just when using the Internet. Everything comes with a certain cost, and if you don’t pay the price of the service, it usually means that you have the product.

Read more:

Best Netflix VPNs that hide WorkBest VPN for KodiBest VPN for FireStickHow you need a VPN

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