Buyers beware: people who choose the subsidized new Google Nexus One phone with a T-Mobile contract will get hit with US$550 in early termination fees if they cancel their service in under four months.
That's because both Google and T-Mobile plan to charge buyers early termination fees.
In its terms of sale, Google explains that customers who buy the Nexus One for the reduced $179 price with a T-Mobile contract will be automatically charged $350 if they cancel service within 120 days. That cancellation fee does not apply during the first 14 days of service.
Google also instructs buyers that if they want to cancel service they must contact their operator directly and they may also be subject to the operator's early termination fee.
T-Mobile's terms of service, also posted on Google's new phone sales Web site, describe its early termination fees. Customers will pay $200 if they cancel with more than 180 days remaining on the contract. T-Mobile also allows a 14 day grace period after customers sign up.
Operators typically charge customers who buy reduced-price phones with service contracts if they cancel the contract early. Most so-called early termination fees start at $200 and go down as the contract runs out.
Verizon, however, recently raised its early termination fee to $350. The U.S. Federal Communications Commission, which did not appear to approve of the hike, recently asked Verizon to explain its decision to raise the fee. One FCC commissioner called Verizon's responses "troubling."
A Google spokeswoman did not immediately reply to a request for comment.
Google unveiled the Nexus One on Tuesday at a press event at its headquarters in Mountain View, California. The phone, designed by Google in partnership with HTC, will be sold initially exclusively on Google's phone sales site. Consumers who opt to buy the unlocked version of the Nexus One for $530 are not subject to the early termination fee from Google.