Jan 11th, 2010

fine-printOh boy – queue up the backlash. Your parents always told you to read the fine print and the Nexus One Terms Of Sale reveal a troubling detail that we can’t quite figure out. If you buy a subsidized Nexus One through your carrier and cancel your account you not only have to pay an Early Termination Fee (ETF) to your carrier but ALSO have to pay GOOGLE an ETF that automatically charges your credit card the remainder of full price of the phone.

This comes directly from Google:

You agree to pay Google an equipment subsidy recovery fee (the “Equipment Recovery Fee”) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service. The Equipment Recovery Fee is equal to the line item in your confirmation email setting forth the discount on the full priced Nexus handheld device related to your carrier service plan activiation. You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.

You agree that the Equipment Recovery Fee is not a penalty but is for liquidated damages Google will incur as a result of such cancellation. These damages may include, but are not limited to, loss of compensation and administrative costs associated with such cancellation or changing of wireless service provider(s), market changes, and changes in ownership. Please note that the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.

I completely understand the ETF with the carrier – the reason you get a discounted phone in the first place is because the carrier recovers the discounted price of the phone over the course of the contract. But why does Google need to charge your credit card for the full price of the phone IN ADDITION to this ETF?

Andy Rubin claimed the goal of Google’s new mobile phone sales distribution was to make things EASIER but this isn’t easy by any means. This is MORE confusing. Consumers have NEVER been used to paying an ETF for the carrier in addition to an ETF by the manufacturer or retailer. But that’s exactly what Google is instituting with these Terms Of Sale.

Maybe I’m totally missing something here. Maybe the agreement that Google has with HTC and T-Mobile make this a necessary measure. But as far as I’m concerned paying two separate ETF fees to carrier and manufacturer is an unprecedented practice that deserves an explanation.

What gives, Google?

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