You’ve heard of double coupons, right. And that’s a good thing. But you probably never heard of double terminations fees. And that’s a bad thing.
Google just introduced its first cell phone, the Nexus One. They sell for a lot of money: $529 if you just want to buy the phone, but only $179 if you buy it as part of a package deal with two years of service from T-Mobile.
If you cancel early, you would expect to pay an early termination fee to T-Mobile:
So, you would owe $200 to T-Mobile if you cancel within the first year and a half of your contract. What you might not expect is to pay a second early termination fee, this time to Google.
If you cancel your service within the first 120 days, you will owe Google an “equipment recovery fee.” That’s the difference between what you paid for the phone ($179) and the full retail price ($529). In other words, $350.
So let’s do the math. You pay $179 for the phone upfront. If you cancel, you pay T-Mobile $200 and Google $350. That totals $729 for a phone that would have cost you at most only $529. Seems like someone is profiting from your early cancellation.
And to add insult to injury, should you want to avail yourself of Google’s 14 day trial period where no early termination fees apply, you will have to pay a restocking fee of $45.