Google Suspends Hundreds of Accounts Involved in a Pixel Resale Scheme

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This week, hundreds of people found out their account was suspended for violating Google’s terms of service agreement. It wasn’t clear exactly what these people did at the time, but this was revealed as more comments came in through various forums on the internet. It turns out they were involved in a reseller scheme that took advantage of a loophole of the United States sales tax laws.

As it turns out, these people ended up buying Pixel and Pixel XL smartphones through Google’s Project Fi website and the Google Store. They had these smartphones shipped to New Hampshire, which is important because this state does not charge their residents any sales tax. Sales tax varies from state to state and can range anywhere between 0% to 9.5% on average. So along with out much the Pixel phones usually cost, sales tax can add another $50 – $80 on top of the purchase price.

This additional cost adds up if you’re a reseller who ships dozens of devices to customers around the country. The thing is, Google’s terms of service for buying a Pixel phone states the customer “may only purchase Devices for your personal use [and] may not commercially resell any Device”. Interestingly enough though, the New Hampshire reseller says they have been taking advantage of this loophole for years with Nexus phones.

So Google either didn’t care before, or this was a new rule added specifically for their new Pixel phones. Also, the people involved in this scheme not only had their access to the Google Store restricted, but Google also prevented them from accessing or using any of their services (like Gmail). This can be a big deal if you rely on Google services for work, or your own personal needs.

Thankfully though, this suspension was short and these people have been allowed to use their accounts again. However, they were sent a warning that repeated violations of their terms of service would get their account banned permanently. For anyone else worried about this, head over to Google’s takeout system where you can archive and download lots of things associated with your account.