Blockbuster announced today that it had reached an agreement with 46 states and the District of Columbia that will compel the video giant to change the manner in which it advertises its late fee policies.
An action in New Jersey earlier this year caused other states to accuse Blockbuster of misleading consumers regarding the new policy, which automatically converts rental items kept seven days past the return date to sales. "Customers should not have to search for the real price hidden behind catchy slogans and disclaimers," said Michigan Attorney General Mike Cox when announcing the settlement.
Blockbuster said Tuesday that it would pay more than $600,000 to cover the costs incurred by states who took action against the company. Blockbuster also agreed to take the following actions by March 31:
- more in-store signage, including door decals, counter signs, and checkout line signs displaying the End of Late Fees brochures;
- No Late Fees Info Centers, complete with the End of Late Fees brochures and terms and conditions, that explain the entire program;
- redesigned receipts that include program details and the sales price and date on which the customer will purchase the movie or game if the item is not returned;
- highlighting of key program details on Blockbuster’s website to make the information even easier to access
- reinforced employee training, including specific reminders for effectively communicating the program to customers;
- an offer to refund/credit customers of corporate and participating franchise stores for prior restocking fees and/or charges for non-returned product; and
- an offer to provide free rental coupons for customers of non-participating franchise stores who did not understand whether the program applied to them at the time of the transaction.
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