Blockbuster sued for late fee claim

[Bronx]

http://money.cnn.com/2005/02/18/news/midcaps/blockbuster_suit/

Blockbuster sued for late fee claim

N.J. attorney general says the video rental chain violated consumer fraud laws.
February 18, 2005: 12:02 PM EST

NEW YORK (CNN/Money) - New Jersey Attorney General Peter Harvey filed a lawsuit Friday against Blockbuster Inc., claiming that the video rental chain engaged in deceptive advertising and violated the state's consumer fraud laws.

"Blockbuster boldly announced its 'No more Late Fees' policy, but has not told customers about the big fees they are charged if they keep videos or games for more than a week after they are due," the attorney general said in a statement.

In a statement, the company said: "We are surprised that the New Jersey State Attorney General never directly contacted us about this. Instead of participating in discussions to allow us to explain our program, the state attorney general has apparently elected to file this lawsuit and hold a press conference.

"We're disappointed he took this action, because we believe our end-of-late fees program is a terrific program and we've received tremendous feedback from both our customers and employees."

According to recent reports, Dallas-based Blockbuster (Research), which operates about 9,000 company-owned or franchised stores, has come under increasing opposition from antitrust enforcers over its hostile bid to acquire No. 2 operator Hollywood Entertainment Corp (Research).

Hollywood Entertainment's board on Thursday rejected Blockbuster's bid in favor of a lower bid from Movie Gallery (Research), saying that the Blockbuster deal "raises significant antitrust issues" that could cause delays or a rejection of the transaction by the Federal Trade Commission.

Blockbuster shares rose about 0.8 percent in midday New York Stock Exchange trading.

[BJ_M]

that is really stupid -- they DO clearly show what the fees are - or will be - in the stores here ..

plus -- if you return the disk after getting the fee - the refund you most of the charge anyway ..

sue sue sue .... couldn't they just have written them a letter first ?

someone must of got a charge and got pissed off or something ....

[handyguy]

Yeah, probably someone from Netflix.

[Timmychuck]

That's good to here, I never like Blockbuster anyway.

[absinthecarolinas]

Idiocy.

I directly asked a Blockbuster employee exactly how this works, and it's rather clear.

- There is still a due date, but no late fees.

- However, if you keep the movie longer than 30 days, you will be charged the retal price of the movie minus what you paid to rent it (seems fair to me).

- BUT, if you return the movie at any time after that point, they simply take the movie back and charge you an extremely nominal "restocking fee." I believe it's $1.25 or $1.50.

Basically, I can pay my 4 bucks and keep a movie for an entire YEAR (or more) if I so desire, and then pay a measly $1.50 to return it. So, for less than 6 bucks, I could keep any movie for as long as I theoretically wanted.

Of course, I'm sure they're not going to let you rent anything else if you own them money for movies you never returned.

Beats the crap out of having to throw on shoes and a coat at 11:50 p.m. at night because you just found a stack of movies that are due.

-abs

[Gargoyle]

Idiocy.

I directly asked a Blockbuster employee exactly how this works, and it's rather clear.

- There is still a due date, but no late fees.

- However, if you keep the movie longer than 30 days, you will be charged the retal price of the movie minus what you paid to rent it (seems fair to me).


-abs

Not quite true -
here's a direct quote from the Blockbuster website:

"Movie and game rentals are due back at the date and time stated on the transaction receipt. There is no additional charge if a member keeps a rental item beyond the pre-paid rental period.However, if a member chooses to keep a rental item more than a week after the end of the rental period, Blockbuster will automatically convert the rental to a sale on the eight (8th) day after the end of the rental period."

- BUT, if you return the movie at any time after that point, they simply take the movie back and charge you an extremely nominal "restocking fee." I believe it's $1.25 or $1.50.

Blockbuster says:
"If the member returns the item within 30 days of the sale date, Blockbuster will credit back to the membership account the amount previously charged to the member’s account or the member’s credit card, as applicable, for the selling price of the item, but the member will be charged a minimal restocking fee.

[DereX888]

Finally! Hopefully some class action suit against most of the rental giant ******** will follow...

[cal_tony]

In a statement, the company said: "We are surprised that the New Jersey State Attorney General never directly contacted us about this. Instead of participating in discussions to allow us to explain our program, the state attorney general has apparently elected to file this lawsuit and hold a press conference.

Filling a suit sounds like the proper way to take care of the problem. I'm sure Blockboster ran this new add past their legal dept. and their input must have been that they could legally defend the ad.
Discussions on the part blockbuster to explain their program, sounds more like wishful thinking.
I can't remember the last time I was stopped by a police officer for a traffic infraction and the officer said to my protestations Oh' I guess we could down and discuss this. From what I remember of those instances the officer always said here's your ticket and If you think your right.. tell it to the judge.

[AlecWest]

I'm not a member of their "no late fees" club. But, the problem I have with them revolves around one store only ... to the point where I sent a complaint to their HQ. A lot of people rent movies often. I almost never do. Once a month, usually ... maybe twice. And, I suspect that one store hopes that their occasional renters don't notice what they're doing. In my case, they were wrong. Every rental slip says that if it's brought back before 11 PM on the due date, you're OK. What I found (on at least 3 occasions) was that films brought back just before 11 PM were not "checked in" until the next day ... and shown on people's accounts as being a day late.

In any case, when I do rent, I try to use mom/pop video stores where the clerk you deal with one day is likely the same clerk you'll deal with later. And, I've never had a late fee from a mom/pop store.

[mattyboy]

Anyone know if this "no late fee" crap applies to Canadians?

[BJ_M]

Anyone know if this "no late fee" crap applies to Canadians?

yes -- and its not crap ... its a good program ..

canada started it about 2 - 3 months after usa ..

[hudsonf]

someone must of got a charge and got pissed off or something ....
_________________

It would probable be more correct to say "some politicians family member or friend must of got a charge and got pissed off or something ....

[lordsmurf]

I found two easy ways to avoid Blockbuster altogether: Netflix and Gamefly.

[BJ_M]

I found two easy ways to avoid Blockbuster altogether: Netflix and Gamefly.

not an option here

on line rental not really all there yet as far as i can see in CND , i got Rogers , Blockbuster and some adult rental places to chose from ...

blockblister near me never gave me any problems and they have different selection anyway than usa stores ... the staff here is also very helpfull and willing to bend - they have canceled extra billings every time when i return stuff late ..
i also sell them a lot of DVDs on their trade in program ..

[MOVIEGEEK]

I think their new ad campaign is a bit misleading but I don't think it warrants a lawsuit.I rent from Blockbuster several times a month and it's nice that I don't have to bring the DVD back by noon the second day(on new releases).

[Yorel]

Blockbuster used to charge $13 plus change for 6 regular movies. I get 7 regular movies from Rogers for the same price. Two weeks ago, I was charged $18 plus change at BB for 6. They said they increased their prices. $5.00 more, and 1 movie less. They will be getting VERY little from me any more.

[BJ_M]

Blockbuster used to charge $13 plus change for 6 regular movies. I get 7 regular movies from Rogers for the same price. Two weeks ago, I was charged $18 plus change at BB for 6. They said they increased their prices. $5.00 more, and 1 movie less. They will be getting VERY little from me any more.

that would suck -- i have not noticed that ... i buy the coupon books and use points also

[DereX888]

I quit renting since when Rogers raised their "7 for 7 days for $9.99" to $11.99 (IIRC).
God I really dont remember when I rent anything (for myself to watch) - and Im still alive lol, so yeah, no one has to use them
Ballbuster was never my favorite, their oldies selection always sucked heh.

[BSpielbauer]

I find it interesting that no one here has mentioned what the actual suit is about.

The problem, of course, has to do with the massive advertising campaign launched by Blockbuster. The campaign is deceptive. In fact, it boldly states a blatant lie: "No more late fees."

The issue is not whether the new policy is a "good" one. It has nothing to do with that.

The issue is not whether you LIKE the policy. That is irrelevent.

The issue is that a major retailer has built an entire ad campaign on a single statement which is a bold-faced lie. (Or, if you prefer, a "bald-faced lie." Although, I doubt if the attorney general is conerned with Blockbuster's lack of facial hair, either, any more than they are concerned with your like or dislike of this retailer.)

The advertising campaign is fraudulent because the typical consumer, upon hearing the words "no more late fees," is most likely going to assume that these words mean what they state: there will not be any late fees.

The reality is quite different, though, as has been covered above. The fact is, there are still late fees. If you bring a rented DVD or videotape back late, and it is after a certain amount of time, you are going to be assessed a fee, and the reason you are being assessed a fee is because it was returned late. And, (amusingly) there is a great deal of confusion among those few who understand this fact as to what those late fees actually are. Several of the misguided posts above should be entered into evidence, as they certainly might help the New Jersy attorney general prove his case.

Absincarolina has been convinced that there are late fees, but only after 30 days. "Moviegeek" believes the campaign is a "bit misleading." However, he believes that litigation is going too far. I would welcome him to purchase my car.

A lie is a lie.

Words mean things.

This lawsuit is warranted, regardless of how much or how little you "like" Blockbuster. This lawsuit is warranted, regardless of how much or how little you "like" Blockbuster's new rental policies.

Just my thoughts,

-Bruce in Chi-Town

[BJ_M]

it is no more a lie than some hot movie star chick saying she uses and loves a certain brand of shampoo or that if you use old spice you have to beat the chicks off with a stick .....

blockbuster is clever in that the fee's that do happen are not classed as late fee's , but worded that they 'assume you want to buy the movie"

[cal_tony]

Not to wade in on this again, but... the Attorney General of NJ must have thought that what Blockbuster was doing was contrary to NJ Consumer Law. He said as much on NBC Saturday morning. He also admitted that so far he had only received 1 complaint but part of his job was to normally be proactive with consumer issues. I don't use Blockbuster but thats only because I use Netflix and to me 1 DVD rental place is enough. I do however visit the Blockbuster online DVD rental site. I think its one of the best in its design. On its face it seems Blockbuster has been very definitive about what it providing -No late fees. Legal advertised, or not, the way they are handling this new program seems to be very well received by its customers. Even the NJ AG acknowledged that! So for those standing up for Blockbuster now, this may not be the end of the world for Blockbuster or the new program. I don't know what remedy the NJ AG will ask for but it may be as simple as some small print on future ads and the whole Bru Ha Ha may even turn out to beneficial to Blockbuster-- Maybe?

[AlecWest]

blockbuster is clever in that the fee's that do happen are not classed as late fee's , but worded that they 'assume you want to buy the movie"

The difference between "clever" and "misleading" is a fine line of difference. I don't know much about this lawsuit. But, from what I do know, there are some similarities between this suit and the multi-state lawsuit against American Family Publishers back in the late 90s ... a lawsuit that forced AFP into an out-of-court settlement, part of which had them agreeing to abandon some of their more "clever" marketing tactics (which, in turn, caused their competitor, Publishers Clearinghouse, to change their tactics as well).

I'd like to see advertising more regulated than it is right now. Currently, a lot of ads on TV and in printed form contain disclaimer statements in tiny print. And on TV, those statements remain on screen for only a second or so. And on radio, ad-makers employ "fast-talkers" to quickly do a read-through of disclaimer statements. These are the changes I'd like to see in ads:

1) ON TV - Disclaimer statements must be of a font size that can be easily read by an average consumer ... and must remain on the screen long enough for the average consumer to read them (as determined by language experts).

2) IN PRINT - It would be enough to require disclaimer statements to be of a font size that can easily be read by an average consumer.

3) ON RADIO - No more "fast-talkers." Disclaimer statements should be read at a speed that can easily be understood by an average consumer.

P.S. BTW, the class-action lawsuit against AFP started out as a lawsuit by one state attorney general ... and mushroomed into a class-action lawsuit involving the attorneys general in 33 states. Just because the NJ state attorney general is the only one involved at this point doesn't mean it won't mushroom into something larger as well.

[lordsmurf]

Well said AlecWest!

I'd also like it added, to the tv/radio, that the volume (in decibels) cannot be louder than the surrounding programming.

[AlecWest]

Well said AlecWest!

I'd also like it added, to the tv/radio, that the volume (in decibels) cannot be louder than the surrounding programming.

Absolutely. Incidentally, after I made my last post (the PS part), I did some checking online to see if the NJ Attorney General was alone. So far, he is ... but only because this is "new news." But according to an LA Times article on February 11th, several attorneys general are considering their own options. And according to the Texas state attorney general, Greg Abbott, an email he received indicated "interest" by the U.S. attorney general's office as well.

I predict that this will mushroom into something much larger unless Blockbuster reappraises their marketing campaign and provides appropriate disclaimers to the public.

[BSpielbauer]

it is no more a lie than some hot movie star chick saying she uses and loves a certain brand of shampoo or that if you use old spice you have to beat the chicks off with a stick .....

blockbuster is clever in that the fee's that do happen are not classed as late fee's , but worded that they 'assume you want to buy the movie"

I think this may be a bit futile, but the difference here should be obvious.

Case one: "some hot movie star chick saying she uses and loves a certain brand of shampoo" -- the shampoo manufacturer has not made any promise nor guarantee that you will like the product. They have merely presented a testimonial. Their claim is that this particular actress uses and loves a certain brand of shampoo.

Case two: "or that if you use old spice you have to beat the chicks off with a stick ....." I am sorry, but i do not recall the "Old Spice" advertising campaign ever claiming that YOU would have to "beat the chicks off with a stick." They merely presented a few dramatizations which depicted actors portraying characters who had this problem.

Blockbuster has made a blanket statement. It is a promise. "No more late fees." They have promised you that this will be the case.

Old Spice made no promises to you. The shampoo manufacturer made no promises to you. Their use of the advertising techniques known as "glittering generalities" and "the testimonial" makes no actual promise. Instead, it relies on you to either infer that the information applies to you, or that it does not. That is your choice.

OLD SPICE and the SHAMPOO MANUFACTURER made no promises. BLOCKBUSTER is making a promise.

Now, let us test the promise as presented in their ads. Go and rent a DVD from them, and keep it out for the next two weeks. Or, perhaps, keep it out for the next 45 days. Then, pay a return visit to the store.

They have lied to you.

Sheesh.

>>>>blockbuster is clever in that the fee's that do happen are not classed as late fee's , but worded that they 'assume you want to buy the movie"<<<<

Sorry, but obviously this issue still needs clarification for some. The NJ attorney general's claim (and it is obviously a correct one) is that the above disclaimer or qualification that you allude to is missing from the advertising campaign. Those television and radio advertsiements do NOT repeatedly chant: "No more late fees, and if you keep it long enough, you get to purchase the DVD." They do not state "No more late fees, unless you keep it more than one week." They do not state "No more late fees, but we have added a new assumption of purchase fee." They do not state "No more late fees, although you may incur a nominal re-stocking fee." They fail to mention the "nominal re-stocking fee," which is, of course, their right to charge, if they only take steps to forewarn consumers that this is a part of the policy. (Albeit we all know that this nominal restocking fee is in actuality a late fee. However, that is also not the issue, here.) Blockbuster fails to run a disclaimer in text, perhaps in a scrolling crawl at the bottom of the screen. They do not run a disclaimer via a voiceover, stated breathlessly by an announcer as the seconds tick down. They do not mention these "nominal restocking fees" or "forced purchases" or any "fees" or "exceptions" or "disclaimers" of any sort anywhere in the advertisements which are now running nationally on network television or on both network and regional radio.

THAT is the issue. THAT is the reason for the suit.

Without a disclaimer explaining that there are exceptions, or qualifications, the statement is reduced to a clear falsehood.

A lie.

This is known as fraud.

Hope this helps some in your understanding.

-Bruce in Chi-Town

[BJ_M]

no they havent - when you return it , you dont pay late fees.... you pay a nominal "restocking fee." I believe it's $1.25 ..

sure is "on the edge" , but i can give all kinds of examples of very similar things ...

im not saying its right or wrong -- but its not something they are hiding .. the alternatives are no restock fee (will mean higher rental fees) or scrap the no late fee policy altogether --

[BSpielbauer]

no they havent - when you return it , you dont pay late fees.... you pay a nominal "restocking fee." I believe it's $1.25 ..<<<<

And, this is one of the fees that they have failed to mention. This is why they are being sued. It is called a "lie of ommission."

Example: I tell you that I will give you my car, free of charge.

Then, I sock you with a bill for $17,236.36, and I refer to it as a "transportation charge." Oops. I omitted that part. Oh, well.

That is a lie of omission. I am guilty of lying. I am also guilty of fraud.

Get it?

>>>>sure is "on the edge" , but i can give all kinds of examples of very simular things ...<<<<

Are these things "simular," [sic], much like the "Old Spice" ad, or are they a very precise analogy, much like my example above?

>>>>> im not saying its right or wrong -- but its not something they are hiding .. <<<<<

Uh, yes, it IS something they are hiding. Through omission.

>>>>the alternitives are no restock fee (will mean higher rental fees)
or scrap the no late fee policy altogether --

<<<<

(Sigh.) Again, this is irrelevent. The issue is NOT whether their policy is a "good one" or a "bad one." That has nothing to do with this. The issue has nothing to do with whether this policy has "alternitives" [SIC]. Blockbuster chose this policy, and then they deliberately failed to mention some hidden fees which are a part of that policy. They are HIDING this, in their major advertising campaigns.

Oh, by the way, it would seem that you did just express an opinion as to whether it is " right or wrong," despite your insistence to the contrary.

I sincerely hope that something here is of some help to your understanding.

Take care,

-Bruce in Chi-Town

[BJ_M]

don't be smart with me young man :P , you seem to fail to grasp that:
1. they are not hiding anything, the policy is clear.
2. people should be able to understand, read, ask questions do due diligence and not have to be led by the hand as so often is the case... i swear the world is turning into a f** pack of morons, at least in some areas ... I think the AG there should spend more time protecting people that live there from themselves as it appears they are incapable of taking care of themselves..
3. The original point i made (and others also) was there is that there are far to many frivolous lawsuits and everyone is sue happy,. In many cases, the only winners are the lawyers.
They got 1 freaking compliant -- it seems as if the only people that didnt understand the policy was the AG and perhaps you judging by your response.
The taxpayers of that area are paying for something that, it would appear, that they don't require. But then again, much of the law profession is self fulfilling and self sustaining (not all) ..

[hudsonf]

Just because you don't agree with our AG you don't have to call us all f** morons! We don't need protection from ourselves! I don't know why he decided to sue Blockbuster but I'm sure he has a good reason. I know I shouldn't take this personal but being from NJ I do.

[BJ_M]

Just because you don't agree with our AG you don't have to call us all f** morons! We don't need protection from ourselves! I don't know why he decided to sue Blockbuster but I'm sure he has a good reason. I know I shouldn't take this personal but being from NJ I do.

i said the "world" (tongue-in-cheek) , not NJ , NJ is a great place , been there lots , really nice state through the hills there ..

re-read my diatribe - i wasnt singling out NJ people , only the AG's perception of NJ people ...

we all know all people from jersey are accurately portrayed in the "Soprano's" :P