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."

Comments

Re:Why do we need a lawsuit?

[BrynM]

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.

and another important point:

[antimatt]

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.

Finally

[serenarae]

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.

Re:Finally

[Michael Spencer Jr.]

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

Sorry to break it to you...

[Hamster Lover]

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.

Quote from Blockbuster's Website

[DavidD_CA]

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.

Re:Price Point

[Jah-Wren Ryel]

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.