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Blockbuster Settles 'No Late Fees' ('End of Late Fees') Claims

Source: Office of California State Attorney General
Published: April 04, 2005

Blockbuster Inc. has agreed to pay $630,000 to settle claims by 47 states that said it misled consumers in advertising its "End of Late Fees" or "No Late Fees" program, California's Attorney General Bill Lockyer said Tuesday.

"Blockbuster's No Late Fees campaign may have had a catchy slogan and clever ads, but it did not tell the truth," Lockyer said. "This agreement ensures consumers no longer will be misled, and that those who were deceived can get their money back."

The Attorney Generals alleged the advertising campaign misled consumers because it failed to clearly disclose that if customers rent a video or game from Blockbuster and keep the item more than seven days after its due date, they automatically are charged the retail price of the product, unless they return it within 30 days. Even if such customers return the video within 30 days, they still are assessed a "restocking" fee of $1.25, or higher at some franchise stores.

As part of the settlement, Blockbuster will clearly display Blockbuster's policy for return of rental products and applicable charges if products are not returned. In addition, the company will provide a full refund or credit to any customer equal to the selling price of any rental item converted to a sale under the program. Customers who returned items within 30 days, but paid a "restocking" fee, will be able to obtain a refund of that fee. A request for restitution must be made in writing and allege a failure to understand the "No Late Fee" program.

Customers may obtain refund forms at company-owned stores and participating franchise stores. To download a Blockbuster refund form, visit http://www.ag.ca.gov/newsalerts/2005/05-022_request.pdf

Blockbuster officials will encourage store personnel to resolve refund requests on the spot, if possible. Customers also may mail refund requests to Blockbuster at 1201 Elm Street, Suite 2100, Dallas, TX 75270, Attention: Mr. Steve Krumholz, Sr. Vice President, by April 28, 2005, or if after that, within seven days of first discovering they are required to make a payment in addition to the initial rental fee.

Blockbuster admitted to no wrongdoing under the terms of the settlement.

Read Full Story at Office of California State Attorney General

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