New Jersey Sues Blockbuster

[Celeval]

Originally Posted by Airhog

Arles: your forgetting one thing however, Blockbuster had the same policy before. If you didnt return a movie, the most in late fees they would charge you is the price of the movie. How is this any different?

1. You own the movie immediately.
2. You aren't restricted from renting movies from BB between the time you start paying the old late fees and the time you've paid the amount of late fees and the price of the movie.
3. You aren't late returning a movie, and don't have any kind of record of delinquincy returning movies.

Pretty straightforwardly not the same policy.

[gstelmack]

Originally Posted by Arles

No, you have to make a purchase (that you can return if you do not wish to). There is a big difference.

THEN THEY SHOULD BE SAYING THAT IN THE ADS!

There does that help understand the point we're trying to make? They gave something with one hand, took away something with the other, but are only advertising what they gave. That means they are barely telling half the story in their ads, in the banners, etc.

This is a question of semantics. If it's okay for Blockbuster to say this publically on air, then all of you backing it should stop questioning any politician's speech in Washington when they invent new words to spin something, because that's what Blockbuster is doing.

This is like the phone companies tacking on "regulatory fees" to your phone bill for things like property taxes, etc. Sure, your phone bill is low, but by the time all these costs of business are adding on as separate charges, your real price is much higher. These word games are getting ridiculous, and now many of you want to let Blockbuster get away with another word game. "It's not a late fee, it's a restocking fee!" Who cares, I was charged a fee when I returned it late! Change the slogan to something that accurately describes what you're doing. I've suggested several earlier in the thread.

Edit: To be a little clearer while being a bit less inflammatory: Blockbuster has clearly gone to a "try before you buy for a small fee" approach instead of a rental. That's what they need to be telling people. "No more late fees" implies you are still renting it without saying one word about the fact that you are buying it now when late. That's all I'm trying to say.

[JonInMiddleGA]

Y'know, all of this silliness reminds me why one of my favorite advertising copy phrases over the past few years has been "See store for details."

And why one of my new favorites may be "terms and conditions apply"

[Arles]

Originally Posted by gstelmack

THEN THEY SHOULD BE SAYING THAT IN THE ADS!

There does that help understand the point we're trying to make? They gave something with one hand, took away something with the other, but are only advertising what they gave. That means they are barely telling half the story in their ads, in the banners, etc.

Welcome to the world of advertising. BTW, according to the Blockbuster site, there is fine print in the ad and something like this is posted at every store:

"New releases can be rented for two days, catalog titles for seven. Games can be rented for seven days. If a customer keeps a title seven days beyond those deadlines, they get reminder calls from the store. A card is then sent in the mail notifying them that the title is due back and that the customer will be charged the full price if they do not return it within 30 days."

So, the customer will get a call and a reminder in the mail explaining that their card will be charged weeks before the actual occurance. Thus, a person could rent a movie, keep it for the initial 7 days and not return it. They would then receive a call (which they disregard). Then, they get a card in the mail a week later saying they will be charged for the value 30 days later. They could disregard that and wait another three weeks before returning it.

So, in essence, they could keep the movie for over 5 weeks, get two store warnings, finally return it and not pay one penny or have their card charged.

Seems like a "no late fees" policy to me. It appears the only way someone would actually have to pay is if they completely disregarded two instore warnings and kept the movies over 30 days past the point they were informed by mail that their card would be charged. At which point I think most people would have a hard time blaming Blockbuster for making the person buy the item.

I honestly don't know what else Blockbuster could do to enforce a "No Late Fees" policy outside of giving away movies to whomever wants them.

[mgadfly]

Would a rose by any other name ...

"Oil Changes For FREE!" (After the oil change is done receiving a bill for $29.99 for a docking bay fee and $5.99 for materials... Sorry sir, the oil change was free and you never asked about any additional fees.)

This reminds me of when I managed a Hollywood Video store (in a former life) and we had no "late fees." Employees would be written up if they even used the term. We had "Additional Rental Fees." If we had a giant banner outside that read "NO LATE FEES!" while charging people without explaining (sufficiently) the subtleties of our "Additional Rental Fees" I would have expected a fair amount of complaints about deceptive advertisement.

[Arles]

Do you guys really think this policy is "deceptive"?

"New releases can be rented for two days, catalog titles for seven. Games can be rented for seven days. If a customer keeps a title seven days beyond those deadlines, they get reminder calls from the store. A card is then sent in the mail notifying them that the title is due back and that the customer will be charged the full price if they do not return it within 30 days."

It's not like they charge your card the moment it goes over the swag time. People get a week swag plus an additional 30 days and two formal warnings before they are charged one cent (for the purchase of the item - that they can then return for a refund). I think that is a responsible manner with which to handle a "No Late Fees" policy and don't see how it's even in the same stratosphere as the oil change example. Plus, this policy is littered throughout every store where the policy is in effect.

[BrianD]

Originally Posted by Arles

"New releases can be rented for two days, catalog titles for seven. Games can be rented for seven days. If a customer keeps a title seven days beyond those deadlines, they get reminder calls from the store. A card is then sent in the mail notifying them that the title is due back and that the customer will be charged the full price if they do not return it within 30 days."

I'd like to see where this quote came from. According to the FAQ section of blockbuster.com:
Q: What if I forget to bring back a movie or game? Won't you charge me something at some point?

A: "If 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."

So, the customer will get a call and a reminder in the mail explaining that their card will be charged weeks before the actual occurance. Thus, a person could rent a movie, keep it for the initial 7 days and not return it. They would then receive a call (which they disregard). Then, they get a card in the mail a week later saying they will be charged for the value 30 days later. They could disregard that and wait another three weeks before returning it.

From the same FAQ section:
Q: What if I return an in-store movie or game rental seven days or more past the due date?
A: We will gladly let you return the movie or game within 30 days of the sale. If the selling price has been charged to your credit card, we will credit the amount charged to your credit card when you instruct us to do so in person (otherwise we will place this amount on your BLOCKBUSTER membership account). If this amount has been charged to your membership account, we will remove the balance. However, in both instances you will be charged a restocking fee plus applicable taxes.

Seems pretty clear that you only get 30 days to return the movie for a refund. Depending on your credit card billing cycle, you see the charge just days before your 30 days is up....assuming everyone checks their credit card bill the day it comes.

So, in essence, they could keep the movie for over 5 weeks, get two store warnings, finally return it and not pay one penny or have their card charged.

This if flat out wrong. They will be billed for the movie, and they will have to pay a restocking fee if they return it.

Seems like a "no late fees" policy to me. It appears the only way someone would actually have to pay is if they completely disregarded two instore warnings and kept the movies over 30 days past the point they were informed by mail that their card would be charged. At which point I think most people would have a hard time blaming Blockbuster for making the person buy the item.

Here you are arguing the legality of the business model. Nobody is complaining about the business model, just the misleading advertising.

I honestly don't know what else Blockbuster could do to enforce a "No Late Fees" policy outside of giving away movies to whomever wants them.

Not renaming their late fee would be a start.

[BrianD]

Originally Posted by Arles

Do you guys really think this policy is "deceptive"?

Is the policy deceptive? No. Are the ads? Yes.

"New releases can be rented for two days, catalog titles for seven. Games can be rented for seven days. If a customer keeps a title seven days beyond those deadlines, they get reminder calls from the store. A card is then sent in the mail notifying them that the title is due back and that the customer will be charged the full price if they do not return it within 30 days."

It's not like they charge your card the moment it goes over the swag time. People get a week swag plus an additional 30 days and two formal warnings before they are charged one cent (for the purchase of the item - that they can then return for a refund). I think that is a responsible manner with which to handle a "No Late Fees" policy and don't see how it's even in the same stratosphere as the oil change example. Plus, this policy is littered throughout every store where the policy is in effect.

http://www.consumer.state.ny.us/clah...dvertising.htm

"False Advertising
Any advertising which is misleading in any material respect is considered to be false advertising. An advertisement is considered misleading if it fails to disclose facts which are important in light of what is stated in the advertisement, or facts which are relevant in the light of the customary use of the product. "

They are leaving out facts which are relevant in the customary use of their product. They are using deception to get people into their store. The fact that these disclaimers are everywhere in the store doesn't change the misleading advertisements.

[gstelmack]

Originally Posted by Arles

Do you guys really think this policy is "deceptive"?

"New releases can be rented for two days, catalog titles for seven. Games can be rented for seven days. If a customer keeps a title seven days beyond those deadlines, they get reminder calls from the store. A card is then sent in the mail notifying them that the title is due back and that the customer will be charged the full price if they do not return it within 30 days."

Yes, because you are missing the restocking fee. Let's go find the real policy on Blockbuster's site. Starting at the main page (http://www.blockbuster.com), I click on the left where they have the big "No Late Fees" icon where I can get more information.

But where is the description you presented? There is a "Click Here" link at the bottom to find out more, but that takes me to a Customer Service login link. You can then click the "Frequently Asked Questions" tab, where the first question is "Now that late fees are ending, can I keep movie and game rentals as long as I want?". The answer is "Movie and game rentals are still due back by the due date shown on your receipt.".

You can then click the related question "What if I forget to bring back a movie or game? Won't you charge me something at some point?". The answer is "If 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."

So now you have to go to "What if I return an in-store movie or game rental seven days or more past the due date?" The answer is "We will gladly let you return the movie or game within 30 days of the sale. If the selling price has been charged to your credit card, we will credit the amount charged to your credit card when you instruct us to do so in person (otherwise we will place this amount on your BLOCKBUSTER membership account). If this amount has been charged to your membership account, we will remove the balance. However, in both instances you will be charged a restocking fee plus applicable taxes."

Now the restocking fee is finally mentioned on Question #3 following their chain. And I finally get to the question: "What are the full movie and game rental terms now that BLOCKBUSTER has stopped charging late fees?" And the full policy is: "Movie and game rentals are due back at the date and time stated on the transaction receipt. There is no additional 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 eight (8th) 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. 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 minimal 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. Additional membership rules apply for rentals. See participating BLOCKBUSTER store for details."

The key here is that you are okay if you are no more than a week late. Once you become more than a week late (typically on the 15th day, but on the 10th day for new releases), you will be charged a "restocking fee". So you don't have 5 weeks free-and-clear as you indicate, you might have a day over 2 weeks.

What they've done is given you a 7-day grace period before charging you the "restocking fee", according to their own web site. You then have another 30 day window before the sale is considered permanent.

Edit: Note, I don't consider the policy itself all that bad. Just that it is being completely misrepresented by Blockbuster. Note the chain I had to follow to find out I'd be charged a restocking fee in lieu of the late fee on Blockbuster's own web page.

[Arles]

OK, I see that they can charge your card anytime after the grace period. But, again, as long as this policy is visible in the stores (as it seems to be) or in the fine print on the ad (as it seems to be), where's the deception?

I see this as no different than a car place that advertises 0% finanancing. Of course, the fine print says its only for qualified applicants. In fact, I think that the Blockbuster policy seems a lot more honest than the car ads.

"False Advertising
Any advertising which is misleading in any material respect is considered to be false advertising. An advertisement is considered misleading if it fails to disclose facts which are important in light of what is stated in the advertisement, or facts which are relevant in the light of the customary use of the product. "

But again, that information is in the fine print on the ads and in the store. It seems to me that all people are left to argue is that it should be "bigger" fine print.

[gstelmack]

Originally Posted by Arles

I see this as no different than a car place that advertises 0% finanancing. Of course, the fine print says its only for qualified applicants.

I don't see the difference either. Those ads tick me off, too

[Raiders Army]

I just ate at Cheeburger Cheeburger today, and let me tell you, Blockbuster has nothing compared to this place:

1. A sign saying "If you wear one of these shirts [their t-shirts that you could buy], your drink is free!" No small print. I promptly bought a t-shirt so that before we go next time, I can put it on, take it off, give it to my wife, have her put it on and then take it off. Free drinks! Oh wait...maybe they mean, we have to wear their shirt to the restaurant...

2. Inside their menu, it says "free refills". Again, no small print. I bought drinks last time I went there. I wonder if I had asked for free refills on those drinks instead of buying new ones if it would work...

3. They also had a vintage sign that said "Pepsi drinks, only 5 cents." No small print that I could see of, but Pepsi was neither on their menu, nor was it only 5 cents.

The three above examples are what is called "common sense" in advertising. Aren't there some whales or trees to be saved vs. late fees at Blockbuster???

[ISiddiqui]

Originally Posted by Arles

No, you have to make a purchase (that you can return if you do not wish to). There is a big difference.

No, there isn't. Paying the full price IS a fee (as is the restocking charge).

http://dictionary.reference.com/search?q=fee

#1 is:

1. A fixed sum charged, as by an institution or by law, for a privilege: a license fee; tuition fees.

Isn't the purchase a fixed sum, charged, for a privilege, being you own the the DVD now?

I fail to see how it is not a fee. Even a semantic argument that a purchase is not a fee does not work here, because when ever you buy something you are charged a fee, that being the sales price.

[Celeval]

Originally Posted by ISiddiqui

No, there isn't. Paying the full price IS a fee (as is the restocking charge).

http://dictionary.reference.com/search?q=fee

#1 is:

1. A fixed sum charged, as by an institution or by law, for a privilege: a license fee; tuition fees.

Isn't the purchase a fixed sum, charged, for a privilege, being you own the the DVD now?

I fail to see how it is not a fee. Even a semantic argument that a purchase is not a fee does not work here, because when ever you buy something you are charged a fee, that being the sales price.

No argument that it's not a fee. It's not a late fee. It's a fee for making a required purchase.

[Celeval]

Originally Posted by Celeval

No argument that it's not a fee. It's not a late fee. It's a fee for making a required purchase.

Dola - I'm out of this thread now, since I'm not going to blow my 2000th post defending Blockbuster.

[ISiddiqui]

Originally Posted by Celeval

No argument that it's not a fee. It's not a late fee. It's a fee for making a required purchase.

And is the fee charged for not returning a video at a specified time? It is. Hence, late fee.

I mean there is a reason why numerous AGs were about to pounce on Blockbuster before the NJ AG did it.

[Arles]

And there's a reason none will win...

[Raiders Army]

The idiots win.
Linky

Blockbuster settles 'no late fees' claims
Top U.S. movie renter to make full refunds to customersThe Associated Press
Updated: 2:58 p.m. ET March 29, 2005PORTLAND, Ore. - Blockbuster Inc. has agreed to pay about $630,000 to settle claims by 47 states and the District of Columbia that the nation’s biggest movie rental chain deceived consumers with its “No Late Fees” campaign, the Oregon attorney general said Tuesday.

The agreement, disclosed by the office of Oregon Attorney General Hardy Myers, also requires Dallas-based Blockbuster to make refunds to consumers who claim the campaign misled them into thinking they could keep the video or DVD for as long as they liked.

Many consumers were angry to discover that overdue game and film rentals were automatically converted to a sale on the eighth day after the due date. If they then tried to return it, they were charged a $1.25 restocking fee.

According to the agreement, Blockbuster will have to make a refund to consumers who were either charged the restocking fee, or else paid the full price of the movie they rented.

The Blockbuster payment of $630,000 is to reimburse states for their legal costs. The cost of the refunds would be in addition to that.

As part of the settlement, Blockbuster will also have to “dramatically alter” the way it advertises its no late fees policy, according to a prepared statement by Pennsylvania Attorney General Tom Corbett.

Blockbuster spokeswoman Karen Raskopf said that the “no late fees” program will continue at Blockbuster, but that the company has agreed to add signage in its stores to better explain the fine print of the program.

“We think our original communications were very clear but we’re happy to do whatever we can to add additional communication to better inform our customers,” she said.

The company has already added the signs to most of its stores, she said, as well as created a No Late Fee information center, where customers can read up on the program. She added that 96 percent of Blockbuster’s customers return the movies within the seven day grace period. “Less than four percent of our customers are going to auto-purchase program.”

Blockbuster launched the no late fees program at its 4,600 U.S. stores on Jan. 1, in the wake of online subscriber Netflix Inc.’s success. Netflix allows consumers to rent up to three DVDs per month for a flat monthly fee of $17.99. They can keep the movies for as long as they want — but can only get a new one once they return the ones they have already viewed.

The states who are not included in the settlement are New Jersey, which has a pending separate suit, and Vermont and New Hampshire.

[Arles]

Smart move by Blockbuster. Make the story go away for pennies. I wouldn't say the "Idiots won" unless you are referring to the attornies on both sides as the idiots

Basically, Blockbuster reimbursed the state's legal fees and agree to refund some late payments ($1.25 each?). Hardly a crippling decision.

[Arles]

Originally Posted by Raiders Army

The states who are not included in the settlement are New Jersey, which has a pending separate suit, and Vermont and New Hampshire.

dola, this was also a separate suit than the original New Jersey one.

[Raiders Army]

Oh yeah, now that I think about it, you're right. Blockbuster won! Yay!

[Arles]

Let's look at their options:

1. Take the case to trial and face atleast 2-3 weeks of negative "Walmart-like" press.

2. Pay what essentially would be less than the cost of their legal team to fight the case to make it all go away.

Wonder which one they should have chosen

[mrsimperless]

I for one am happy to see this happen. I have been pissed ever since their policy shift at the beginning of the year. Not only are there "(No) more late fees!" they have also done away with overnight rentals, which essentially increased their minimum rental price. I know I pretty much always rented new releases, and I also pretty much always rented them overnight only. I think I might take my business elsewhere now.

[Arles]

Originally Posted by mrsimperless

I for one am happy to see this happen. I have been pissed ever since their policy shift at the beginning of the year. Not only are there "(No) more late fees!" they have also done away with overnight rentals, which essentially increased their minimum rental price. I know I pretty much always rented new releases, and I also pretty much always rented them overnight only. I think I might take my business elsewhere now.

First, did they increase their price to rent DVDs in store? I didn't know they had (not that I would be surprised if they did).

Second, the reason they shifted their policy was because of all the complaining/lawsuits from people that would rent an overnight movie, not return it for two weeks, then get all upset when they were hit with fees. So, there was really no practical manner for them to do an "overnight rental" given the state of circumstances.

[SackAttack]

Blockbuster spokeswoman Karen Raskopf said that the “no late fees” program will continue at Blockbuster, but that the company has agreed to add signage in its stores to better explain the fine print of the program.

The issue was never in-store signage. The issue was deceptive advertising. Does anybody else think that this amounts to a "We're sorry, how 'bout some more of the same?" settlement?

[rexallllsc]

Originally Posted by Arles

Second, the reason they shifted their policy was because of all the complaining/lawsuits from people that would rent an overnight movie, not return it for two weeks, then get all upset when they were hit with fees. So, there was really no practical manner for them to do an "overnight rental" given the state of circumstances.

Poor, poor Blockbuster!!!

[ISiddiqui]

Originally Posted by SackAttack

The issue was never in-store signage. The issue was deceptive advertising. Does anybody else think that this amounts to a "We're sorry, how 'bout some more of the same?" settlement?

I think that at least with better signage in stores, you won't have people who get the fee out of the blue and get all pissed about it. Some people may, but the Blockbuster people can just point ot the signage openly displayed.

[Arles]

Originally Posted by SackAttack

The issue was never in-store signage. The issue was deceptive advertising. Does anybody else think that this amounts to a "We're sorry, how 'bout some more of the same?" settlement?

How would someone rent a movie from Blockbuster (with a return date) without going into the store?

[SackAttack]

Originally Posted by ISiddiqui

I think that at least with better signage in stores, you won't have people who get the fee out of the blue and get all pissed about it. Some people may, but the Blockbuster people can just point ot the signage openly displayed.

You will, however, have people who see the advertising - which apparently doesn't need to be changed under the terms of the settlement - and drive in to the store only to discover that - guess what? - the policy is pretty radically different from the ad claims.

People will still get pissed. Just in different ways. All you've done here is shift the burden that the customer service reps are going to feel from those who have been hit with the fees to those who have been misled and now won't be coming back as a result.

[ISiddiqui]

At the very least, they don't find it out when they check their bank statement, which ends up leading to lawsuits. Just have it in the 'fine print' in the ads.

[Tekneek]

This resolves one of their legal situations, but it doesn't clear up their business ethics. It seems, to me, that they don't feel they can make money without some bait-and-switch, which tells me they aren't nearly as confident about their business model as they would have us believe. They have never put much effort into being better than the competition, rather they have just tried to buy up the competition.