Posted on: Wednesday, March 30, 2005
Blockbuster to pay fine, refunds in late-fee deal
By Deborah Adamson
Advertiser Staff Writer
Blockbuster Inc. has settled charges that it misled Hawai'i and other consumers nationwide with its "No Late Fees" program, and agreed to give out refunds, state officials said yesterday.
The Dallas-based movie and game rental company agreed to pay $630,000 to settle allegations of deceptive advertising brought by Hawai'i, 46 other states and the District of Columbia. Hawai'i's share of the pie is $13,000, to pay for attorney fees and investigation costs.
Blockbuster also agreed to refund fees to customers who said they thought the "No Late Fees" program meant they could keep the rental for any length of time.
Who's eligible: Customers who didn't know or understand all the terms of the "No Late Fees" program and were charged a restocking fee or the sales price of a rental made between Dec. 28, 2004 and April 28, 2005.
Where to go: Fill out a complaint form at any Blockbuster store or write the company at Blockbuster, Attn: Steve Krumholz, Senior Vice President, 1201 Elm St., Suite 2100, Dallas, TX 75270. You have to say that you didn't understand the terms of the program. If you send a letter, you'll get your refund in four to six weeks.
What to bring: Any rental you were forced to buy. No receipts are necessary.
Deadline for refund requests: Sept. 30
Other restrictions: Refunds will be issued only for the initial transaction
Complaints: To report difficulties in getting a refund, call the state at 587-3222. Vermont, New Hampshire and New Jersey didn't participate in the settlement. New Jersey filed its own lawsuit, alleging fraud.
Blockbuster spokesman Randy Hargrove said the company believes it communicated the program's terms clearly to customers but was "happy" to address the states' concerns.
"Blockbuster was never asked (by the states) to change the program," he said. "It was about the communications."
As part of the settlement, the company will install more in-store signs, set up information centers, redesign receipts to better reflect program details, boost worker training, among others.
Under the program, which officially kicked off on Jan. 1, customers who keep a rented video or game more than seven days beyond the due date are charged the selling price for the item minus the rental fee paid. The customer then has 30 days to return the product and receive a refund for the selling price less a $1.25 restocking fee.
Hargrove said the "vast majority" of Blockbuster customers keep their rentals on average one or two days past the due date. Overall, less than 4 percent of its customers were forced to buy the rental in the first two months of the program.
Blockbuster said customers can fill out a complaint form at its stores to get a refund. Receipts are not be required but consumers should bring any rentals they were forced to buy.
Fees eligible for a refund must have been on rentals made from Dec. 28, 2004 to April 28, 2005. Refunds will only be given on the first transaction since presumably the consumer would be aware of the fees after being charged. Refund requests must be received by Sept. 30.
Consumers who have difficulty getting refunds should contact the state at 587-3222.
The "No Late Fees" program is offered in 28 Blockbuster stores in Hawai'i out of more than 5,000 locations nationwide.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
"Catchy slogans can be misleading if (the advertising) doesn't clearly and fully disclose all the terms of the deal," said Mark Recktenwald, director of the Hawai'i Department of Commerce and Consumer Affairs. The settlement "will ensure in the future there will no more misunderstanding."
How to get your refund
