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Blockbuster Sued Over Late Fees Claim

DesiVideoGamer writes "CNN has a story about Blockbuster's violation of New Jersey's consumer fraud act in which they made false claims in their "No More Late Fees" campaign. New Jersey Attorney General Peter Harvey filed a lawsuit today in hopes that Blockbuster would stop misleading their customers into thinking they could keep their movie rentals as long as they want without penalty."

25 of 650 comments (clear)

  1. Re:Why do we need a lawsuit? by BrynM · · Score: 5, Informative
    With netflix you can... can't you?
    Yes you can. I had one rental for three months. Not a peep or complaint from them - I did pay my usual monthly charge though. This is major benefit of the Netflix business model. They did the accounting and see that if I pay the monthly fee, who cares how long I have the movie. I can only have three at a time, but if I want to hold onto one until I want to see it I can.
    --
    US Democracy:The best person for the job (among These pre-selected choices...)
  2. Re:Well, it is worse-- by OverlordQ · · Score: 2, Informative
    No, he had it right you have it wrong:

    From blockbuster's site link:

    f you still have a movie or game seven (7) days after the due date shown on your receipt, we will convert your rental to a sale. The movie or game will be sold to you at the selling price in effect at the time of rental, which is either the retail price, or, when available, at the previously-rented selling price, less the initial rental fee you paid.
    --
    Your hair look like poop, Bob! - Wanker.
  3. Re:Why do we need a lawsuit? by anethema · · Score: 2, Informative

    This is totally and utterly false.

    You have your normal free account, and there are no more late fees. That's it. (if you keep more than 7 days past the return time, there is a restocking fee, but its a buck 25, who cares).

    --


    It's easier to fight for one's principles than to live up to them.
  4. Re:Truth in advertising by Issue9mm · · Score: 1, Informative

    Because you have buying power when you're paying the full amount in cash. I have no idea why this is, honestly, but I know it to be true. If you finance a vehicle, even with 0%, you'll pay close to sticket price. One of my close friends came into a small inheritance (trust fund really), and bought a new Durango with it. As he paid cash, he bought the car (fully loaded, with every possible option; including 5.7L hemi, GPS, back-seat video, block heater, AWD, Satellite radio, etc), for just slightly more cost than the base model.

    I think with taxes, titling and tags, he ended up paying approximately $28,000 for it, brand new, loaded, including delivery (as they didn't have one on the lot matching his specs). In the negotiation process, he hadn't mentioned that he'd be paying cash, and they were quoting numbers of $38,000-$40,000. As soon as he told them he'd pay cash, they starting cutting the amount.

    Again, I don't know why this is for certain, but it's the cold, hard truth.

    -9mm-

  5. Used to work for blockbuster by bryan986 · · Score: 0, Informative

    I used to work for blockbuster, and let me tell you, if there was not such a thing as late fees, we would never get a movie back, the only reason they are changing the policy is because it is a pain in the ass to constantly haggle the customer to get the movies back in or get them to pay a late fee, not to mention the policy is clearly listed in the brochures in store, and online, and you can always sign up for your membership without a credit or debit card.

    --
    There is no sig
  6. and another important point: by antimatt · · Score: 4, Informative

    The no-late-fee policy only applies necessarily to corporately owned stores; the privately owned ones are not required by Blockbuster Inc. to honor the new system. Mind you, some are, but it is voluntary on the part of the respective owners.

  7. Re:Price Point by Eil · · Score: 2, Informative


    I have to agree. Most people never think to shop around for video rentals, but you'd be surprised what kind of value you can find just looking around. My wife and I got tired of Blockbuster's steep prices, short rental periods, and constantly out-of-stock new releases. So we tried Hollywood Video; same crap, different store. Finally, we ended up renting from a place called Family Video. Their rentals are only $2 and they never run out of new releases. They're a really decent chain, give them a shot if they're in your area. (BTW, of the three, they're also the only ones with a pr0n room. ;)

  8. Finally by serenarae · · Score: 5, Informative

    I work for Blockbuster as a manager. I think it's about damned time someone started complaining. They've been engaging in deceptive business practices for years now. I'll outline this new policy for you guys:

    You have 7 days after the due date to get your movie back. This means, if it's due monday, get it back the following monday by NOON.

    If you fail to do this, you will get charged the retail price (unless it's been out for awhile) of the dvd, game, or vhs.

    Bring it back before 30 days (this is where they get really shady, because even I dont know if it's 30 days late or 30 dates after the 7 day thing), and you will get a full refund minus a $1.50 "restocking fee"
    This fee is supposedly charged to cover the cost of sending you a bajillion phone calls and postcards reminding you that your stuff is due. Mind you, there's a glitch in the system at the moment that will still call you even if your stuff has been returned. (I might also add that you should call us if you get that call and know you brought your stuff back. It may be on the shelf NOT checked in)

    If you don't bring it back before the 30 days, you are STUCK with the movie. Come in and get your cover art, you're entitled to it. There is no way you can get your money back after this point.

    So, ending this long reply. No matter what, unless you get your movie back within two weeks (most of the time), you're still getting charged.

    Hope this helped you out... I hate this company.

    --
    see sig. see sig run. run sig run.
    1. Re:Finally by Michael+Spencer+Jr. · · Score: 3, Informative

      I'd like to add to what you said. I work for a major credit card processor (First National Merchant Solutions), and according to Visa/Mastercard regulations, any of these full-retail-price charges could be charged back.

      Merchants are not allowed to use Visa/Mastercard for collections purposes. They can't charge you "punitive fines" without your approval and authorization.

      Here's an example: suppose you stay at a hotel. You agree to pay for your room stay, but while you're there you get drunk and trash the place, causing $500 in damages. You leave before anyone notices the damage, so nobody had a chance to bill you.

      The hotel owner decides to bill your Visa card for the amount of the damages. While it may be true that you owe the hotel owner $500, you never gave the hote owner permission to take that $500 from your Visa card. Because of that you can talk to your bank, tell them you didn't authorize the charge, and get the money back. (You can then go to jail for whatever crime you committed, or write a check for that same amount of money...but we're just talking about Visa/Mastercard's world here.)

      In this case, Blockbuster will try to argue that your signature on the rental agreement authorizes them to charge your card. For *this particular sale* though, when you left the store you understood you would be charged only a rental fee. I believe whatever authorization you gave on your contract doesn't actually protect them as much as they think it will.

      So if you charge back one of these charges from Blockbuster, you aren't saying "I don't really owe Blockbuster money", you're actually saying "I might or might not owe Blockbuster money, but either way, they do not have the right to take that money from my Visa/Mastercard account. Ask me to write a check or pay cash instead."

      If they bill you the cost of a game ($50.00), that costs them at least 75 cents in credit card processing fees, probably more. So they *have* to charge some kind of restocking fee, or else that "gentle reminder" when they charge your card will *cost* them money when you return the game.

      Above all else, though, keep this in mind: if someone charges your card for punitive damages or fines/fees you did not specifically agree to, you can file for a chargeback. Talk to your issuing bank.

      Understand the difference though:
      "You owe me $500 for tearing up your hotel room. Pay me now or I'm calling the police." --> "OK, fine, charge my card." -- in this case there was authorization, so no chargeback.

      Hope this helps!

      The opinions in this post are my own, and may or may not also reflect the opinions of my employer, First National Merchant Solutions. I did not actually have the phone-book-sized Visa/Mastercard regulations manuals in front of me when writing this, so I might be wrong. The "hotel" example came straight from our chargeback department, though, so I'm *very* sure the theory behind this post is correct. This is not banking advice -- your situation may vary, so talk to your own banker for situation-specific banking advice.

      --Michael Spencer
      Stop Code 3270
      First National Merchant Solutions
      1620 West Dodge
      Omaha, NE 68197

  9. Sorry to break it to you... by Hamster+Lover · · Score: 4, Informative

    but you can FAST FORWARD through the commercials, if fact if you keep the FFWD pinned, so to speak, it only takes a moment to get to the main menu. I agree that it is utterly frustrating that you cannot "skip" the commercials, but not as bad as you make out. I have yet to see a DVD that does not permit fast forwarding through commercials, if that's even possible in the DVD standard.

    Note I have only viewed the Canadian version of Shrek 2, which contains both English and French audio tracks, so the American version might be different.

  10. Quote from Blockbuster's Website by DavidD_CA · · Score: 5, Informative
    Just out of curiosity, I went to Blockbuster's website to see what they would advertise.

    Sure enough, they have a huge banner ad saying "The end of late fees". There are no asterisks, fine print, or other disclaimers.

    However, if you click on the "Terms" button at the bottom of every page, you get a few pages of legal text such as their privacy policy, copyrights, terms regarding their Online Rentals, and .... terms on their In-Store Rentals. Lo and beyold:

    IN-STORE MOVIE AND GAME RENTAL TERMS. As of Jan. 1, 2005, movie and game rentals are due back at the date and time stated on the transaction receipt. There is no additional rental 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 eighth day after the end of the rental period. Blockbuster will charge the membership account the selling price for the item in effect at the time of the rental, which is either (1) the retail price charged by that BLOCKBUSTER store for the product if sold as new, if the product is not available for sale as previously rented product at that BLOCKBUSTER store at the time of rental, or (2) the selling price charged by that BLOCKBUSTER store for the product if sold as previously rented product, if the product is available for sale as previously rented product at that BLOCKBUSTER store at the time of rental. The selling price will be discounted by the amount of the initial rental fee paid by the member at the time of rental. 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 restocking fee. All rental items must be returned to the proper BLOCKBUSTER store. These rental terms are subject to change without notice at any time. Participating stores only. Rental terms and policies may vary in franchised locations. Additional membership rules apply for rentals. See store for full details.
    --
    -David
  11. Re:Price Point by Jah-Wren+Ryel · · Score: 3, Informative

    Rogers Video is the largest movie rental company in Canada

    That still makes them teeny-tiny compared to the big boys, they have less than 300 stores - BBV has about 7500 and Hollywood Video has about 2000.

    Even including their cable franchaise they have all the leverage of a spec of lint.

    --
    When information is power, privacy is freedom.
  12. Re:Price Point by Jah-Wren+Ryel · · Score: 2, Informative

    If what you say is the case, you should be able to find some substantive supporting evidence on the net, something better than anecdotes from ACs. Go ahead and post it.

    Meanwhile:
    There had been reports of Blockbuster doing its own internal censorship which are apparently false.
    http://www.everything2.com/index.pl?node=Blockbu st er

    "Blockbuster Video has no plans to carry these products," said Blockbuster spokesman Blake Lugash. "We don't edit or censor any of the films we carry in our store and we try to carry the theatrical versions."
    http://www.wired.com/news/print/0,1294,54759,00. ht ml

    Question: Does BLOCKBUSTER censor its movies?
    Answer:
    We do not edit or otherwise alter movies ourselves. We leave the methodology as to how ratings are applied specifically and completely to the studios involved. We are retailers and not members of the MPAA (Motion Picture Association of America), so we take no position on individual scenes or the overall artistic merits of a film. We are not in the content business.

    http://blockbuster.custhelp.com/cgi-bin/blockbus te r.cfg/php/enduser/std_adp.php?p_faqid=239

    --
    When information is power, privacy is freedom.
  13. Re:Well, it is worse-- by uberdave · · Score: 2, Informative

    New releases were only 2 day rentals last time I rented (back in August).

  14. Re:Well, it is worse-- by DarkEdgeX · · Score: 2, Informative

    Those of us in "reality" will stick with the notion that "no late fees" means "no cost, at all, under any circumstances, if you return your rental late". Now, if they'd said--

    "NO LATE FEES (but only if you bring it back within a week of the due date)"

    or even--

    "NO LATE FEES*

    *only if returned within a week of the due date"

    We wouldn't be where we are right now.

    If Pepsi says every person who buys a 2 litre bottle of soda gets a million dollars on 8/7/2005, they don't get to make all sorts of exceptions unless they advertise those exceptions. Businesses shouldn't advertise things unless they're willing to live up to their end of the bargain (which is where consumer protection laws, like those being enforced here, come into play). Otherwise businesses would just advertise anything to try and put their competitors out of business.

    "Oh hey, who needs to use NetFlix when going to the corner Blockbuster is so much easier, and cheaper now, I mean, it's not a big deal that I return 'Fried Green Tomatoes' a few weeks late! Whoohoo!"

    --
    All I know about Bush is I had a good job when Clinton was president.
  15. no late fees - not! by Anonymous Coward · · Score: 1, Informative

    The worse part about the whole thing is if you read the fine print, the local blockbuster stores can still charge late fees. Most of them in my area did not partake in the no late fee promotion. Alot of customers found out the hard way that the no late fee promotion is only in particpating video stores.

  16. I used to work in a video store by Anonymous Coward · · Score: 2, Informative

    When a new release movie hits the shelves, it can cost as much as $100 to the store. These movies can't be had for the same prices that you as a consumer pay when they hit DVD on the retail shelves.

    The peak demand for the movie occurs in the first week, but then it rapidly drops off. This is because everyone who comes into the store always wants to rent the very latest thing.

    As a result, in order to recoup their investment in any given movie, they have to rent it out at least 17 times at $6 a pop, and that's not even taking into consideration their other running costs. Ideally they want to rent it out to a different customer every night of the first week after release, and then hopefully as often as possible after that. Even so, it can be up to a year before all copies of a given title end up paying for themselves.

    Consider a really big title of which they might have 100 copies. That's $10,000 tied up in a single movie. They need to do a lot of rentals before they make up their outlay. Some titles never make a profit, but the store has to carry the losing titles as well as the winners so that people will feel like there's a good selection available.

    It should come as no surprise, then, that the "No late fees" campaign does not mean that you can rent a new release on the day it comes out and keep it for as long as you want. And just say you kept it for a few weeks and decided that you liked it, how will you feel when you see that the true cost of the movie to Blockbuster ($100) has been billed to your credit card?

    It's just painfully obvious that this is the way things work. I admit, sounds like they should be clearer about the "restocking fee", but I can't fault them for doing things like making telephone reminders. It is a business after all, and its purpose is to make a profit.

    1. Re:I used to work in a video store by stienman · · Score: 2, Informative

      It must have been a very long time ago that you used to work in a video store. The video stores sued the movies studios for inflating prices a long time ago. Now the videos come to the stores for $20 to $30 per video for smaller chains that purchase them through distributers. Blockbuster is its own publisher and distributer so I'd be surprised if they were paying more than $20 per movie after licensing, production,l and distribution.

      -Adam

  17. Re:Well, it is worse-- by Squirmy+McPhee · · Score: 2, Informative

    This is a MUCH better deal than before, so to the fucking jerkoff suing them: "STOP IT"

    Despite the misleading ad, this is way better than before, and i dont want to lose it because of some whiney malcontents and a money grubbing lawyer.

    So companies should be allowed to lie in exchange for giving customers a better deal? I don't think so. And you're not going to lose this because of lawsuit -- Blockbuster can't afford to go back to the old system. The lawsuit seeks only to change the advertising to something more honest.

    As for the "money grubbing lawyer," he happens to be the Attorney General of New Jersey, doing his job by enforcing the laws of that state. Oh, and he doesn't get any money out of this either -- just the same paycheck he gets whether he sues Blockbuster or not.

  18. Re:Price Point by global_diffusion · · Score: 1, Informative

    If you don't think that Blockbuster edits it's films, rent "Bedrooms and Hallways". I saw it first in a theater, then rented it later for friends. The Blockbuster rented film was confusing, and really not as good, because the film had all the sex scenes edited out that were between men. These were not graphic in any way, and didn't show anything, but they were used to carry on the plot through conversations. The editing of these scenes therefor made the movie quite confusing, and I was pissed off because it ruined the film for my friends.

  19. Re:Gasp! by shokk · · Score: 2, Informative

    Gee, they only have the information for the new service at the counter. It clearly says in FAQ format that if you keep the movie for 8 days past the due date that you have purchased the movie. If you're too irresponsible to return a movie before 8 days are up, you should get into their Freedom Pass which will be cheaper in the long run than buy every movie you decided to view but didn't have time to actually view.

    With enough people in my family watching movies, I only watch a movie once a week, but we are constantly cycling movies in and out of Blockbuster on just the 2-movie pass.

    --
    "Beware of he who would deny you access to information, for in his heart, he dreams himself your master."
  20. Re:The Blockbuster Plan from the horse's mouth! by anthony_dipierro · · Score: 2, Informative

    Regardless of what you were told by the guy on the phone, or what you thought the TV ads meant, it is your legal responsibility to abide by the rental contract, the terms of which are available at any Blockbuster.

    Well, you probably won't get the movie to keep forever, but the guy on the phone still committed fraud as an agent of Blockbuster, and you could sue Blockbuster (respondeat superior) for any damages you suffered due to that fraud. Which basically means, once they charge you for the movie and you return it, you could get out of the restocking fee. If they won't let you (and since they're currently being sued they probably will), then just call your credit card company and reverse the charges.

  21. Re:The Blockbuster Plan from the horse's mouth! by LogicX · · Score: 2, Informative

    My best friend works at BlockBuster, and I was hanging out when they were getting all their corporate propaganda for the new No Late Fees, and they actually have a little handbook that says 'Customer says X, you say Y' -- and there are about 3-4 levels of the customer having to ask for details before they're supposed to hand them over. They're supposed to give as ambiguous and non-informative answers as possible until the customer practically gets irate.

    --
    May this post be indexed by spiders, and archived for all to see as my Internet epitaph.
  22. Re:We'll call it the TANSTAAFL Law by tfoss · · Score: 2, Informative
    Their competitor Netflix is saying the same thing - "Keep them as long as you want! No late fees!" Except I'm paying $17.99 a month and can't get any new movies until I return the old ones, so ergo the late fee is $17.99/month. Duh.

    Are you serious? Surely you are just trolling (or are an idiot). "Keep them as long as you like." Check, you can. Period. In fact, netflix is happier the longer you keep them. "No late fees." As in, extra fees for turning in a movie late. There are none. You *cant* turn a movie in late. The monthly fee is the same, regardless of whether you return every movie you get the same day, or whether you don't return a single one. I can't imagine a way you can consider that a "late" fee.

    -Ted

    --
    -=-=- Quantum physics - the dreams stuff are made of.
  23. Re:Well, it is worse-- by DarkEdgeX · · Score: 2, Informative

    Why does common sense dictate this? It says "NO LATE FEES". If I return something late, say, a month late, and I get charged a fee, isn't that the exact opposite of what their advertising is claiming?

    Isn't that unfair to their competitors that they can advertise something they have no intention of living up to?

    Oh, and that "whiney malcontent" "fucking jerkoff" suing them is an Attorney General of a state in the United States. It's not a citizen crying foul, it's an AG seeing an obvious violation of consumer protection laws (not to mention unfair business practice; or are we saying it's OK to advertise anything now to put your competitors out of business even if you never actually live up to your offers?).

    --
    All I know about Bush is I had a good job when Clinton was president.