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Blockbuster Offers Coupons to Settle Late-Fee Suits; Won't Change Rental Policy

5 Jun, 2001 By: Hive News

Blockbuster Inc. offered to give store discounts, rather than cash, to settle a class-action lawsuit with customers who claimed the nation's largest video-rental chain charged excessive late fees, reported Bloomberg News.

Blockbuster is proposing to give coupons valued at $9 to $18 for use as discounts on rentals and purchases to members who were charged extended-viewing or non-return fees between Jan. 1, 1992, and April 1, 2001.

In addition, the Dallas-based company said it would pay as much as $9.25 million in plaintiff's attorneys fees and expenses. Blockbuster said that would constitute about 2% of the face value of the coupons.

Blockbuster won't make cash refunds for the fines, which were usually about $4.23. It doesn't plan to change its extended-viewing fee policy, which allows customers to keep rentals for two nights and charges for an additional rental period even if the deadline is missed by only a few hours.

If approved by the 136th District Court of Jefferson County in Texas, the ruling would extend to 22 other cases around the U.S., said Ed Stead, Blockbuster's legal counsel. The agreement reached with the plaintiffs has preliminary approval from Jefferson County Judge Milton Shuffield, Stead said.

Under the proposal, members who were charged the fees at one of Blockbuster's 7,700 stores will automatically receive certificates when they rent videos. For example, a customer with less than $30 in fines would get two certificates for free "Blockbuster Favorites" video rentals and five $1 certificates for use on any nonfood purchase, a Blockbuster spokesperson told Bloomberg.

Blockbuster customers who were charged the fees during that time but aren't part of the suit can register for coupons by filling out a form available on the company's Web site or by calling 800-224-2703. The certificates would be redeemable Jan. 15 through May 15, 2002, the company said.

A hearing to approve the proposal is scheduled for Dec. 10 in Beaumont, Texas.

The shares of Blockbuster, a unit of Viacom Inc., fell 2 cents to $21.79. Viacom fell 10 cents to $57.05.

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