‘No more Late Fees’ draws investigations

By Dirk Vanover

Blockbuster, one of the nation’s leading retailers in movie and videogame rentals, is facing a lawsuit in New Jersey in response to its “No More Late Fees” program introduced at the beginning of the year. But the Illinois Attorney General’s office has not yet decided whether the state will take legal action against the company.

“We are participating in a multi-state investigation,” said Gail O’Connor, spokeswoman for the attorney general.

O’Connor said Illinois is one of 37 states investigating Blockbuster’s “No More Late Fees” program. She said the investigation is ongoing and will look into many of the issues raised by New Jersey’s attorney general.

New Jersey Attorney General Peter C. Harvey filed a lawsuit against Blockbuster last week. Harvey alleged that the company’s new program violated New Jersey’s Consumer Fraud Act and merchandise advertising regulations because it did not disclose key terms about the program in the new “No More Late Fees” policy.

“Blockbuster boldly announced its ‘No More Late Fees’ policy, but has not told customers about the big fees they are charged if they keep videos or games for more than a week after they are due,” Harvey said in a statement issued by his office. “Blockbuster’s ads are fraudulent and deceptive. They lead people to believe that an overdue rental will cost them absolutely nothing when, in fact, customers are being ambushed with (a) late fees in some stores, (b) so-called ‘re-stock fees,’ and (c) credit card or membership account charges equal to the purchase price of the video.”

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Under the “No More Late Fees” program, Blockbuster customers are given a one week grace period after the rental due date to return their movie or game. On the eighth day, however, the customer is charged the full amount of the movie or game minus the rental cost. Customers then have 30 days to return the video to the store, at which time the charge will be removed, minus a re-stocking fee of $1.25.

“We’re surprised the New Jersey attorney general never contacted us about this,” said Randy Hargrove, spokesman for Blockbuster. “We’re disappointed he took this action because we believe our end of late fees program to be a terrific program.”

Hargrove said the company has received tremendous feedback from its customers and employees about the “No More Late Fees” program, and Blockbuster is doing its best to ensure that its customers understand the new program and do not experience problems.

“Blockbuster will give customers two reminder phone calls and send a postcard to remind customers that they still have the movie or game,” Hargrove said.

After customers have been charged for the movie or game, they will receive an additional postcard reminding them to return the item.

Dan Bobzin, store manager for Champaign’s Blockbuster on 1305 S. Neil St., said the “No More Late Fees” program is required for all corporate Blockbuster stores and franchise stores have the option to participate. He also said the Blockbuster stores in the Champaign-Urbana area are all corporate.

“I haven’t personally had any problems with it (the ‘No More Late Fees’ program),” Bobzin said. “We’re not getting approval or disapproval in any great numbers.”

Ariel Weinstein, freshman in engineering, said she typically rents movies once or twice a month. Even though the “No More Late Fees” program will probably not affect her renting habits, she thinks eliminating late fees and allowing the customer to keep the movie another week is a good idea.

“It’s really annoying having to pay for a whole other movie when you’re only 10 minutes late,” Weinstein said.