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Blockbuster Pays N.J. $90,000 to Settle 'Late Fees' Suit

6 Jan, 2006 By: Erik Gruenwedel

Blockbuster Inc. will provide $90,000 in credits to 75,000 New Jersey customers who paid restocking fees as part of a settlement of a “No Late Fees” lawsuit filed against Big Blue last February by the state's attorney general's office.

The Dallas-based No. 1 video rental company, which admitted no wrongdoing, also will pay New Jersey $50,000 in attorneys' fees, investigative costs and related consumer protection initiatives brought by the state's Consumer Affairs division.

As part of the settlement, Blockbuster agreed to properly disclose on signage in stores and customer receipts the price that will be charged if a movie or game rental is converted into a sale. Big Blue will also void any converted sale for merchandise returned within 30 days of the date the rental was converted to a sale.

“We filed suit against Blockbuster in February 2005 because we had serious concerns about its ‘No Late Fees' program,” said Attorney General Peter Harvey. “The company has taken steps to clear up any confusion about its program and has voluntarily entered this settlement, which will reimburse customers caught off guard with restocking fees. We want to make sure that consumers get what they pay for. This settlement achieves that objective.”

In December, the Arkansas attorney general's office began looking into allegations that select Blockbuster franchise stores in the state, as well as Alabama, Mississippi and Tennessee had begun charging late fees without informing customers.

Last March Blockbuster paid $630,000 to 47 states that threatened to file similar litigation and made refunds to customers charged the purchase price on merchandise returned more than seven days late.

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