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Returning your Nexus One? Prepare to pay up to $550.

Thinking of returning Google’s Nexus One phone? Customers may think twice after confronted by penalties from both Google and service provider T-Mobile that could amount to $550 in early equipment return and contract cancellation fees.

Full price for the phone without a contract is $539, not including service fees by T-Mobile, Google's first service partner.

The early contract and equipment penalties come as the Federal Communications Commission reviews an increase in early termination fees, or ETFs, for Verizon Wireless smartphones. The nation’s largest cellphone operator raised its penalties for smartphones to $350 from $150, sparking questions from the FCC about the increase.

FCC Chairman Julius Genachowski said last week that Verizon’s explanation for why it increased fees “raised more questions than answered them.” Verizon said in a letter last month that its increased fees were to recover the costs of more expensive devices and for the costs of marketing and operating stores.

Here's how the fees break down:

T-Mobile charges a $200 ETF for customers who purchased a subsidized version of the Nexus One phone for $179 with a two-year T-Mobile contract. That fee would drop to $100 for customers who terminate with three months to six months left in their contracts. Customers who cancel with three months left would be charged $50.

But those fees are in addition to Google’s equipment recovery fee of $350 between 14 days and 120 days after purchase. Within 14 days of purchase through Google, Nexus One customers won’t be charged the penalty.

In a statement, a Google spokesperson described its equipment fee:

This is standard practice for third party resellers of T-Mobile and other operators, and you will find similar policies for other mobile service resellers. The T-Mobile early termination fee is separate and handled by T-Mobile

By Cecilia Kang  |  January 13, 2010; 9:30 AM ET
Categories:  Early Termination Fees , FCC  
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If someone keeps a phone past 14 days, why shouldn't they have to pay some of its cost? That's well past a "trial" period.

Posted by: ah___ | January 13, 2010 10:01 AM | Report abuse

That is pretty common with lot of smart phones even though Nexus One ETF are slightly more. But on the good side, what if one cancels the contract after 4-months? There is no fee to pay to Google. Just $200 to t-mobile making Nexus one a bargain if you cancel after 4-months. It would cost you just $179 + $200 = $379 if you enjoyed your 4 month service with t-mobile.

Posted by: spolina | January 13, 2010 1:09 PM | Report abuse

I bought my nexus one phone online (through pricequest for $150. I do like the phone but something is wrong with the 3g I think I got the promo price through Pricequest so how will the return work?

Posted by: Sean24 | January 13, 2010 1:18 PM | Report abuse

Wal-mart sells those prepaid phones for less than $20 and you add time with a prepaid card

no conntract no billing nothing

great for kids who lose them

and to give to people who are going on a trip and do not have a phone

we give then away to clients--very popular

Posted by: ProCounsel | January 13, 2010 5:09 PM | Report abuse

The usual trial period for smart phones is 30 days, not 14 days.

No other carrier allows customers to be subjected to a second ETF charge from the smart phone's producer. Contrary to what one commenter claims, the double fees apply throughout the contract, with T-Mobile reducing its share over time.

The combined fee of $550 is the highest in the industry.

Posted by: query0 | January 13, 2010 5:47 PM | Report abuse

The question is: If I buy a subsidized phone for $179 and pay the ETF of $200 - do I then have an unlocked smartphone for $379?

THAT sounds like a good deal :)

Posted by: om4n | January 15, 2010 10:58 AM | Report abuse

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