Blockbuster Settles No Late Fee Suit

fistfullast33l writes "In a followup to a previous Slashdot story, Blockbuster has settled a lawsuit with 47 states and the District of Columbia over its No Late Fees advertising campaign. The New York State Attorney General's Office released the following: 'The Attorneys General alleged that the advertising campaign launched in late December 2004 was misleading because it failed to clearly disclose that, seven days after a movie or game's return due date, the consumer would be charged its selling price if the item were not yet returned. The Attorneys General also alleged there was insufficient disclosure that not all Blockbuster franchise stores were participating, leaving customers of those stores wrongly believing that they, too, would not have to pay late fees.' Blockbuster will be refunding customers as part of the deal." Additional commenary available on MSNBC.

Comments

Late fees indeed

[Bifurcati]

Guess that's some serious late fees for Blockbuster!

Re:Late fees indeed

[Chasuk]

...it failed to clearly disclose that, seven days after a movie or game's return due date, the consumer would be charged its selling price if the item were not yet returned.

I don't live anywhere near a Blockbuster, nor did I do any more than skim the contents of the advertising campaign when it came out, yet these details were sufficiently clear to me.

...also alleged there was insufficient disclosure that not all Blockbuster franchise stores were participating, leaving customers of those stores wrongly believing that they, too, would not have to pay late fees.

See my statement above; it applies in this case as well.

So, we penalize Blockbuster, who were trying to offer a service that I would have been glad to use had I lived within a reasonable distance from one of their outlets, because people are fucking stupid, or illiterate, or both?

This isn't news. This would have been news:

"American public too stupid to understand gist of simple advertising campaign. More news at 11:00."

Re:Late fees indeed

[Chasuk]

A "late fee" is a penalty for keeping the video out past the specified time. Blockbuster isn't charging a late fee, they are selling you the video according to a contractual agreement. An enormous difference, in my mind. With a "late fee," Blockbuster keeps the video and I am punished for my own sloth/stupidity/absent-mindedness.

This is the equivalent of the "you break it, you own it" policy in many stores. You knock over a dispaly of china and destroy it, you own it, and the ownership isn't even as attractive an option as Blockbuster offers, as you have only shards. With Blockbusters option -- which you didn't have to agree to -- you at least walk away with the merchandise.

Re:Late fees indeed

[Theaetetus]

A "late fee" is a penalty for keeping the video out past the specified time. Blockbuster isn't charging a late fee, they are selling you the video according to a contractual agreement. An enormous difference, in my mind. With a "late fee," Blockbuster keeps the video and I am punished for my own sloth/stupidity/absent-mindedness.

Not quite, but unfortunately, the article misses the major point: Blockbuster would charge you the full price of the movie after 7 days (not unreasonable) and when you return it, they would 'buy it back', removing the charge from your credit card minus a restocking fee. The "restocking fee" was, in reality, a late fee for keeping the movie past 7 days.

The difference is obvious when compared to Netflix - take a movie out, keep it for as long as you want, months even, and when you return it, there's no additional charge for keeping it too long. That's "no late fees". Blockbuster's version is "late fee with a different name".

And this is important becuase...

[Nom du Keyboard]

And this is important to Slashdot readers who probably download their entertainment because...

Re:And this is important becuase...

[LewsTherinKinslayer]

And this is important to Slashdot readers who probably download their entertainment because...

Not everyone who reads /. does nothing with his spare time but download illegally pirated movies and warez programs. I imagine most readers are perfectly legitimate.

Re:And this is important becuase...

[Professor_UNIX]

And this is important to Slashdot readers who probably download their entertainment because...

Do you really waste hours of time downloading television programs and movies from the Internet? I've found it's much easier to just go rent a movie than to spend hours downloading some 8 gig DVD rip only to find it's gay porn some jackass put up with the same name as the movie I was looking for (which was not gay porn BTW). I guess I'm just getting old, but I have more money than time these days.

Re:And this is important becuase...

[StalinsNotDead]

I imagine most readers are perfectly legitimate.

And some are just bastards.

Re:And this is important becuase...

[ziggy_zero]

You know....you don't have to watch the little progress bar when you download stuff...you just kind of let it sit there for awhile on its own and you are free to do other things! Amazing, I know, but true.

Am I the only one?

[slapout]

Wow. Am I the only one that said "there's got to be a catch to this" when this thing started and went to their website to check it out. I knew that they would charge you for the movie because I looked it up. Did you think they were just going to let you keep the movie?

Re:Am I the only one?

[porcupine8]

Well, given that Netflix really has no late fees for real, I don't think that it's entirely ridiculous to think that Blockbuster was offering the same. True, Netflix works on an entirely different business model, with a subscription fee and a limit to the number of movies you can have out at one time, so upon further inspection BB's deal is unlikely to be the same.

But for some random guy whose buddy is using Netflix and just knows his buddy can keep movies as long as he wants, why shouldn't he take BB's claim at face value?

(Aside from the inherent problem in taking any advertised claim at face value - but in reality, you can't expect the general public to think that way.)

No Late Fees - You Just Have To BUY It...

[Stanistani]

Truth makes lousy advertising slogans, dunnit?

Good.

[LewsTherinKinslayer]

I used to work at GameCrazy (a part of the Hollywood Video chain,) and we had a lot of customers who would come in, and basically say, why should we be renting from you anymore? Blockbuster has no late fees. When we informed them that if they didn't return the movie within a week of the due date they would be charged the full price for the item, not a single customer told us they were made aware of that fact.

I went to Blockbuster myself a couple months ago and the man who checked me out, the manager, said to me "And don't forget, we no longer have any late fees!" Certainly a misleading comment.

Re:Good.

[MightyMartian]

You've revealed the other side of this dishonest advertising campaign. It hurts competitors by convincing customers of an impossible scenario. When the competitors refuse to stoop to the same level as Blockbuster, customers are lost. This campaign in particular is so unbelievably slimey that you just have to wonder at the people running the company's legal department. I mean, I can understand crooked executives and mentally-challenged marketers, but did the lawyers actually think that they were going to get past consumer protection laws?

Anyone know...

[LoganAvatar]

... what 3 states were not involved, and why?

Re:Anyone know...

[blueskies]

Why?

Probably because they are demanding more from blockbuster? It was a settlement not a judgement, so I'm assuming that the other states are holding out for a bigger settlement.

Blockbuster wants to settle:
Blockbuster spokeswoman, Karen Raskopf, said the settlement excluded the state of New Jersey, which last month filed a lawsuit accusing Blockbuster of failing to disclose key terms of its new rental policy.

``We continue to talk to them. We are hopeful we can reach a resolution with New Jersey,'' Raskopf said.

You must be the only one

[AtariAmarok]

"Did you think they were just going to let you keep the movie?"

That is what the ads strongly implied.

Re:You must be the only one

[Rufus88]

I figured there was probably a catch, but also thought that maybe they were adopting a Netflix-type model, where a customer could keep a movie as long as he likes, but couldn't rent any more until the late one was returned.

Re:You must be the only one

[MightyMartian]

Well, to some extent that is the entire purpose of consumer protection laws. People can be very naive, particularly when a marketing campaign is designed specifically to tug at the ol' greed strings.

Re:You must be the only one

[angle_slam]

Agreed. I think any Netflix subscriber probably would have guessed that Blockbuster had adopted this model when they heard the "no late fee" ad campaign.

Hidden charges

[Bifurcati]

I really hate companies that try and slip extra charges into the fine print. There was a phone card company in the UK that advertised "No connection fee!" but when you looked in the fine print there was a "Disconnection fee" of 25p - the same as everyone else's connection fee! What a crock!

And the problem is that when people get hit by this fee, they don't do anything about it - they just roll over and pay. So good to see some action being taken!

Re:Late Fee Paradox

[Godman]

The idea is that when you return it, you get a refund, but you still have to pay a "restocking fee"

Scenario: Consumer "Bob" rents movie "Incredibles" from Blockbuster.

2 weeks later, 1 week after due date. Blockbuster charges "Bob's" account $17.95 for "Incredibles"

1 week after that: "Bob" brings movie back. Blockbuster credits "Bob's" account for 17.95 minus a "restocking" fee for putting the movie back on the shelf.

Not "late fees" per se, but still extra clams to shell out.

Bittorrent: No late fees!

[AtariAmarok]

Anyone care to evaluate the slogan in the topic?

Re:Bittorrent: No late fees!

[anakin876]

Congratulations! You've been randomly selected to be assessed 15,000 dollars per DVD you downloaded as part of our "The MPAA sucks and charges you late fees when you least expect it" program. It's easier than driving out to your mailbox! All you have to do is download movies. Don't worry, sooner or later, we'll catch you!

The entire store has no movies now

[diediebinks]

Anybody actually been in a Blockbuster since they instituted the No Late Fees? The only thing this promotion did was make it so there are no movies in stock.

Its in the details

[smashin234]

I went to a blockbuster a couple days ago, and they have a big sign on their door that explains the details.

Yes, they will charge you full price for the item after 7 days. However, if you bring the movie back after 7 days you will not be charged full price. You will be charged a "restocking fee" instead of a "late fee". Granted, it wasn't that bad at $1.50, but I still laughed after reading about the "restocking fee."

Blockbuster's Slogan

[mikeboone]

Their slogan was honest. I remember the commercials:

"The end of late fees. The beginning of more."

I jokingly said to myself that they meant the beginning of more fees, but I guess they weren't joking and instead were being honest.

Damn Government

[brjndr]

This sickens me. How could we let the government do this?

Clearly, this should have been left to the people. (By people I mean a huge class action suit where lawyers get millions and each customer would get a free rental or some other nominal compensation. That is how the system is supposed to work.)

Stupid government. THEY TOOK OUR JOBS!!!

It wasn't on the stores.

[AtariAmarok]

"Agreed. On their website, it was burried in the small fine print. It definitely was not easy to find. "

I've been driving by these Blockbusters for a while now. They all have giant round signs that say "No late fees!". There is no fine print on the signs.

What's the big deal?

[ssand]

Here in Canada, all members of BlockBuster recieved a brochure outlining the terms of this, and it really isn't all that surprising. Does anyone really expect a video store to allow you to keep a video for as long as you want?

netflix model

[xant]

This is precisely what the Netflix model is. They send you a movie, you keep it as long as you want. Along with the 2 movies we received recently I've got a DVD next to the TV we've been meaning to watch for 3 months. Netflix doesn't care. You send it back when you're done, you get another DVD. The only thing sending the movie back does is refresh the choices you have next to your TV.

Buried underneath those somewhere are a couple of DVDs we had when we closed one of our Netflix accounts to change the name it was under. That was over a year ago. Netflix doesn't care.

Blockbuster introduced "no late fees" as a direct answer to the Netflix model.. at least, that's what people apparently thought. They only wanted to create the impression that they were like Netflix, obviously, without actually doing any of the work.

Never trust these ad campaigns

[AtariAmarok]

Blockbuster: No late fees.

McDonalds: Our fried lard-balls are fat free!

NBC: Must-see TV

Click the monkey and win a free iPod

Napster 14 day trial: Download a million songs for FREE

Nigeria: Give us $14,000 and we'll give you millions.

Slashdot: Our moderation system is fair and balanced.

Fox: Our news is fair and balanced.

On the other side, you have one of the most true ad campaigns in history, for the Eagle car company: "Eagle: Not intended for the general public". The general public wholeheartedly agreed.

Automatic Purchase Program and Franchise Revolt

[HackingNetflix]

They just changed late fees to an automatic purchase program. Worse, when you return the movie after you've "bought" it, they give you a store credit and sock you with a handling fee.

Up to 20% of stores are franchises and many revolted against the "No More Late Fees" program, causing customers to be totally confused. "No More Late Fees" commercials running on all channels and yet my local Blockbuster still charges late fees?

I've been covering this story and more at: http://www.hackingnetflix.com/

- MikeK @ HackingNetflix.com

Who would believe it?

[AtariAmarok]

"Sure, you're right. But who would actually believe this?"

Looks like we agree that the ads are rather deceptive. I hate frivolous lawsuits as much as the next guy, but it is not frivolous to sue over late-free harassment when you respond to a "no late fees" ad. What part of "no" do you not understand?

But of course

[AtariAmarok]

"So, you figure that a fee that is charged if and only if the video is late is not a late fee?"

It is merely a delayed mandatory financial assessment. How dare you assume it to be anything like a "late fee" !!!