Get your Nexus One subsidized? Beware of 2 ETF's...

[Jeremy]

I am totally blown away by this one but if you purchased your Nexus One for the $179 price and void your contract with T-Mobile you not only will have to pay T-Mobile there ETF but the credit card you used to make the purchase will get charged the complete difference of the phone... Google calls it "Equipment Recovery Fee".

Ouch... now what reason would Google have to do this? Greed perhaps? T-Mobile should be the one who takes the hit and that's why they charge a ETF if you cancel your contract.

I wish this was all false but it's true. Not a cool move on Google's part in my opinion.

 

[frunkiss]

i think it's fair & it's up to 120 days. One thing to understand is that t-mobile is not selling these phones at a discount. they're not even selling them at all. So the discounted price is coming from Google. If you cancel your account they want to recover the discount they gave you in return for the carrier's agreement. It's a way to recoup the money for the phone, plus the shipping costs, processing, transaction fees, they waived at the time of the purchase.
T-Mobile recoups their ETFs for the cost of their potential profits and other charges involved.
I see it as fair.

"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."

- Google' Terms of Sale

Now Verizon's $350 ETF on Smartphones ("Advanced Devices") is way different in my opinion and really shady, because Verizon buys those units at a discount.
Obviously the FCC thinks so as well.

 

[addictedtoblackberry]

honestly, this entire thing is not a cool move at all by tmo or google. How can I buy a phone if I can try it out?

 

[addictedtoblackberry]

Now Verizon's $350 ETF on Smartphones ("Advanced Devices") is way different in my opinion and really shady, because Verizon buys those units at a discount.
Obviously the FCC thinks so as well.

haha, nice zinger.

 

[Jeremy]

i think it's fair & it's up to 120 days. One thing to understand is that t-mobile is not selling these phones at a discount. they're not even selling them at all. So the discounted price is coming from Google. If you cancel your account they want to recover the discount they gave you in return for the carrier's agreement. It's a way to recoup the money for the phone, plus the shipping costs, processing, transaction fees, they waived at the time of the purchase.
T-Mobile recoups their ETFs for the cost of their potential profits and other charges involved.
I see it as fair.

"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."

- Google' Terms of Sale

Now Verizon's $350 ETF on Smartphones ("Advanced Devices") is way different in my opinion and really shady, because Verizon buys those units at a discount.
Obviously the FCC thinks so as well.

The reason you pay EFT's to carriers is for the simple reason they took the hit on the device itself. The EFT is in place so they can recoup the money they would lose on giving you a discount on a particular device. So if T-Mobile is not giving you the discount on the Nexus why should they be able to hit you with a EFT.

This is the first and only time this has been done before... again, maybe I am crazy but in my opinion, not cool.

Here is the fine print direct 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.

 

[frunkiss]

well i still think it's fair.

but i guess not everyone reads the terms of the agreements before slapping down money and they really really really need to have the phone as soon as it comes out, so i could only sympathize so much.

i've wanted this phone since i heard about it early december and i made sure to know as much as i could before i put my money down for it, which is why i joined this forum, read as many articles as i can, ask people who bought the phones questions and learn as much as i can first. Which is why i haven't bought the phone just yet.

 

[Jeremy]

well i still think it's fair.

but i guess not everyone reads the terms of the agreements before slapping down money and they really really really need to have the phone as soon as it comes out, so i could only sympathize so much.

i've wanted this phone since i heard about it early december and i made sure to know as much as i could before i put my money down for it, which is why i joined this forum, read as many articles as i can, ask people who bought the phones questions and learn as much as i can first. Which is why i haven't bought the phone just yet.

You have every right to think it's fair. Nobody is saying you can't think that. It's not about everyone reading terms of agreements to me. It's about this being the first time that I can recall this happening. Nothing more nothing less.

Now I'm not 100% certain on deal between T-Mobile and Google but that would be like Apple and AT&T hitting you with two separate fees if you canceled your iPhone in the middle of your contract.

Oh yeah one more thing to consider if you cancel you pay $175 to T-Mobile, then another $350 Google now toss in the $180 you paid for the phone that totals $705 for a $530 phone. SHADY. And I hope no one says that extra cost is for some made up fee.

 

[frunkiss]

i think t-mobile charges a $200 ETF.

The way i see it is Google gives you an option to return the phone to avoid that fee.

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.

So this may seem shady to some, i agree, but it's not a mandatory charge. I think it's a great way to prevent people from buying the phone subsidized and turning around, canceling the contract, then trying to profit from selling the phone.

As with anything, always read the fine print.

I'm surprised this is making the blogs now. They mentioned this in the rumors in late December. They even talked about it a little in the Mountain View presser. I don't see it being a problem if you have good intentions. I mean if you bought the phone and can't afford, cancel your plan, and return the phone.
Part of that extra money can be going to repackage, refurbish, and resell these returned phones.

 

[Phil Nickinson]

You have every right to think it's fair. Nobody is saying you can't think that. It's not about everyone reading terms of agreements to me. It's about this being the first time that I can recall this happening. Nothing more nothing less.

This is also the first time a phone has been sold this way, at least in recent memory. Including the iPhone (which was close, but backward).

Here's my take.

 

[Ryan32]

This made me angry at first, but then i did some level-headed thinking, and i'm ok with it.... This is why:

This "ETF" from google is only for the first 4 months. The ETF cost? Exactly the amount (combined with the original subsidized price) to equal the original unsubsidized cost.

What does this prevent? It prevents "scalpers" from getting the phone subsidized, and then cancelling right away with a small ETF from T-mobile, then flipping the phone on ebay....

Now the T-mobile ETF? It's for breaking your contract with them. There are always downsides to breaking a contract, always stipulations involved. If you don't like it, that's fine... Pay for the phone outright.

Although there is a tad bit of shadiness (on T-Mobiles side) in this deal, i don't think it's nearly as big of a problem as the "I want the phone but i can't really afford it" generation. You agree to a 2 year contract, the phone is subsidized (your essentially putting it on credit), and then you want an easy out without paying....

Take some responsibility. If you don't want the cost of putting it on credit, buy it outright.... The option is there. What it seems to me is that you people want all the advantages of buying the phone outright, without paying for it.

 

[Jeremy]

I knew this would be a good topic to debate.

Judging from all of the complaints already about this phone Google is giving you 14 days to try out a bug ridden phone that will not see an update within those 14 days. It's just bad for the average consumer who does not know any better. (I assume you could send the phone back to Google after the 14 days, I'm not sure how long they give you.)

I could understand if the amount was the total of a unsubsidized phone but it's close to $200 more if for some reason you had to cancel after 14 days. And no, not everyone out there is a scammer or scalper.

And just wait, when this hits Verizon with their $350 EFT like someone mentioned earlier... all hell will break loose.

 

[TaeKwonDonkey]

I think its totally fair, you agreed to a contract and if you can't keep your word then you should be forced to pay. It doesn't matter if you just want a new phone or if you've lost your job, you signed a binding agreement. Its not about your current predicament, its the basic fact that you signed an agreement. Tmobile has no-contract plans and you had the option to buy the phone contract-less. If you sign a contract, be a man and follow through with it or get yourself a tracphone

 

[MedioGringo]

You guys realize that every third party retailer does this right? Go buy a Droid Eris from Amazon and read the fine print. You get hit with $350 from Verizon and $300 from Amazon.

Have you guys seriously never read a 3rd party's contract before? I sure as hell did before I bought my Hero, took it back and bought the N1.

Here's how it works:
Google sells you the phone at a discount. They eat $350 bucks. The reason they cancel that fee after 120 days is because Tmo pays them a commission AFTER 120 days is up for getting you to sign a 2yr Tmo contract. At that point, you are square with Google.

After 120 days, you only pay Tmo's ETF.

Although I agree, BEFORE 120 days, Tmo has not lost any money, they aren't subsidizing the phone at all, so they should not charge an ETF. BUT, after they fork over hundreds of bucks to Google as a commission, they are now indirectly subsidizing your phone and need to recoup their losses if you cancel.

In the end this is still a sweet deal. You can cancel your contract after 120 days, sell an unlocked N1 on eBay for 400 bucks--at least--and then take your profits and go get a new phone.

Is it really too much to ask for Google to say "Here's a cutting edge device for 180 bucks, just please keep it for 4 months so no one gets screwed?"

 

[jhamilton3#CB]

I don't find it fair at all.. I find it completely crazy.

When the phone is having major 3G issues, etc.. and those likely won't be fixed within the customer's first 14 days -- they pretty much get screwed into sticking it out, etc..

 

[MedioGringo]

I don't find it fair at all.. I find it completely crazy.

When the phone is having major 3G issues, etc.. and those likely won't be fixed within the customer's first 14 days -- they pretty much get screwed into sticking it out, etc..

My phone is fine. If you are having problems, send it back. It doesn't take two weeks to find out the Tmo's service is messed up in your city. How would this situation be any different if you bought a Hero from Best Buy and Sprint was having problems?

 

[Cory Streater]

You guys realize that every third party retailer does this right? Go buy a Droid Eris from Amazon and read the fine print. You get hit with $350 from Verizon and $300 from Amazon.

That's true actually.

 

[MedioGringo]

I could understand if the amount was the total of a unsubsidized phone but it's close to $200 more if for some reason you had to cancel after 14 days.

That doesn't make any sense. Lets say Google dropped the ETF to 150 bucks to add up to $530 ($180 contract price, $200 Tmo ETF, $150 Google ETF) Lets say you cancel after a month and pay the fees. Google still gave you $350 off the price of your phone and only got $150 back from you. They're still out $200. Just because it added up on your end doesn't mean it added up on theirs. On the other hand, Tmo gets 200 bucks from you but loses nothing, since they didn't subsidize the phone. Tmo is the bad guy here.

What WOULD be fair, is for Tmo to not charge an ETF until they pay Google their commission after 120 days. At that point, they could start charging you an ETF since they are now indirectly subsidizing the phone.

Make sense?

 

[Ryan32]

I don't find it fair at all.. I find it completely crazy.

When the phone is having major 3G issues, etc.. and those likely won't be fixed within the customer's first 14 days -- they pretty much get screwed into sticking it out, etc..

Nobody is getting "screwed" into anything. YOU AGREED TO IT. You have 14 days to decide "i don't like this", and return it without the fee's. If you keep it beyond that 14 days, but < 4 months, you are expected to pay both TF's. If you keep it past 4 months, you don't have to pay the Google fee's, but you do T-Mobile.

This is cut and clear. There are plenty of deals out there that "screw" the customer over... This isn't one of them. Take some personal responsibility.

 

[bananaslug613]

I am totally blown away by this one but if you purchased your Nexus One for the $179 price and void your contract with T-Mobile you not only will have to pay T-Mobile there ETF but the credit card you used to make the purchase will get charged the complete difference of the phone... Google calls it "Equipment Recovery Fee".

Just buy the phone using a Visa gift card with enough money loaded to purchase the phone originally from Google. They can't charge their fee using that payment method.

 

[jhamilton3#CB]

Nobody is getting "screwed" into anything. YOU AGREED TO IT. You have 14 days to decide "i don't like this", and return it without the fee's. If you keep it beyond that 14 days, but < 4 months, you are expected to pay both TF's. If you keep it past 4 months, you don't have to pay the Google fee's, but you do T-Mobile.

This is cut and clear. There are plenty of deals out there that "screw" the customer over... This isn't one of them. Take some personal responsibility.

You can drop the personal responsibility attack. I didn't attack anyone with my comments so keep that crap off this forum.

Second of all, someone is screwed over if they really like the phone but it has too many issues, and the 14 days is up.

If an update doesn't come in those 14 days, they are screwed if they do like the phone despite the problems.