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Blockbuster to Pay $630K Settlement of ‘Fees' Concern

29 Mar, 2005 By: Erik Gruenwedel

Blockbuster today agreed to pay $630,000 to 46 of 47 states whose attorney generals had registered concerns with the No. 1 video rental company regarding over its “No Late Fees” promotional campaign, implemented in January.

The fee, which amounts to $13,000 per state to help cover costs associated with the inquiries, does not include restitution or closure to New Jersey, the only state to file an official claim against Blockbuster.

The New Jersey complaint centered on the fine print in Blockbuster's nationwide advertising campaign for “the end of late fees” and sought compensation for consumers whose accounts were charged with forced sales or a $1.25 restocking fee.

“The New Jersey situation is still out there, and we are hopeful about resolution with that,” said Blockbuster spokesperson Karen Raskopf, who added that the attorney general of New Jersey didn't communicate its concerns to Blockbuster prior to filing the suit.

“I think he has acknowledged that he had no customer complaints when filing the lawsuit,” Raskopf said.

She said that once the company realized there were common concerns among the states about the communications supporting the late fees, it felt that as a national company it should implement a national solution.

Blockbuster said that by March 31 it will implement increased in-store signage, including door decals, counter signs and checkout line signs with End of Late Fees brochures.

Store receipts will feature “fees” details, including the sales price and date on which the customer will purchase the movie or game if the item is not returned.

In addition to further information on its Web site, Blockbuster said it would improve employee training regarding the “fees” program and provide store credits or refunds for customers at participating stores; free rental coupons for customers at nonparticipating franchise stores.

“The program has not changed at all,” Raskopf said. “We think we were very clear with our initial communications, but we are happy to provide additional communications support.”

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