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FOR IMMEDIATE RELEASE
March 29, 2005
AG Announces “No Late Fee” Settlement with Blockbuster


SEATTLE – Attorney General Rob McKenna today announced that he and the Attorneys General of 46 other states plus the District of Columbia have reached an agreement with Blockbuster Inc., to settle allegations that the company misled consumers in the advertising of its “No Late Fee” program.

The Attorneys General alleged that the advertising campaign was misleading because it failed to clearly disclose that if a consumer who rented a video or game from Blockbuster kept the item out more than seven days after its return due date, the consumer would be charged the selling price of the video or game. If the item was returned after the seven-day due date but before 30 days after the due date, the charge to the consumer for the video or game selling price would be refunded, but the consumer would be charged a “restocking” fee of $1.25 or more. The Attorneys General also alleged there was insufficient disclosure of the fact the program was offered only at participating stores, misleading some customers of nonparticipating franchise stores who thought they would not have to pay late fees.

“Enticing, but incomplete, marketing slogans can mislead consumers,” said McKenna of the settlement. “Advertisers must clearly describe all material terms and conditions attached to an offer to adequately inform consumers and comply with the law.”

Under the agreement, Blockbuster must provide a full refund or credit to any customer who participated in the “No Late Fee” program whose rental items were converted to a sale upon their return in good condition. The refund or credit shall be on a one-time per customer basis, but will cover all rental items converted to a sale before the customer learned that returning a rental item more than seven days after the due date would result in a sale. If the customer already returned the item but paid a “restocking” fee, the customer can obtain a refund of the “restocking” fee.

Consumers who believe they are entitled to a refund may get a refund request form at their local Blockbuster store. Blockbuster has asked its personnel to try to resolve requests on the spot if possible. Consumers may also send their request to Blockbuster Inc., 1201 Elm Street, Suite 2100, Dallas, TX 75270, Attention: Steve Krumholz, by April 28, 2005. Consumers can also download the form from the Attorney General’s Office Web site or call 1-800-551-4636 to have one mailed to them.

Consumers who rented from a non-participating franchise store which did not have signs saying it was not participating in the “No Late Fee” program, and who did not know they would be charged a late fee, may ask for a coupon request form at the store. These forms may also be downloaded from the Attorney General’s Office web site. Eligible consumers are those who rented items after December 31, 2004 and before March 29, 2005.

As part of the settlement, which Blockbuster entered into without any admission of wrongdoing, the company will pay the states a total of $630,000 for attorneys fees, cost of investigation and consumer protection. We estimate the Washington Attorney General’s share of the cost recovery will be $12,500.

For more information on the Blockbuster settlement visit the Attorney General’s Web site.

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For more information contact:
Kristin Alexander, (206) 464-6432, KristinA1@atg.wa.gov

 

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