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Blockbuster hit by fraud lawsuit in N.J.

19 February 2005 4:53 by James "Dela" Delahunty | 72 comments

Blockbuster hit by fraud lawsuit in N.J. Movie rental giant Blockbuster has been hit by a fraud lawsuit in New Jersey. New Jersey Attorney General Peter Harvey sued Blockbuster Inc. Friday, claiming the video rental chain is deceiving customers with its new "No More Late Fees" rental policy. Blockbuster is accused of violating the states consumer fraud laws with its new 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," the attorney general said.

"There is no question about it, there is a violation of New Jersey's consumer fraud act," he added. Under the new policy consumers can keep a movie for a week over its due return date but after that, a consumer would be charged a restocking fee of $1.25. If a consumer keeps a rented movie for more than 30 days after its due return date, then Blockbuster will charge the consumer the full retail price of the item.

"The fact is there are no longer late fees at Blockbuster," the company said. "We're disappointed he took this action, because we believe our end-of-late fees program is a terrific program and we've received tremendous feedback from both our customers and employees." The company was surprised that he did not even try to contact them to get an explanation of the new policy first. The Attorney General said that investigation began as soon as the policy was implemented. "Our principal goal is restitution to the consumer," he said.

Source:
CNN


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    Discuss this article!  There are more user comments available, read them here
    bzboarder (Member) 22 February 2005 0:16 Send private message to this user   
    nephilim,

    i think there was some misunderstanding in my posting, and i apologize for it. while i was a former employee of blockbuster, im not really sticking up for it. while i do believe there is a difference between a "late fee" and a "restocking fee", i dont believe that what blockbuster did was ethical. it was misleading and i think something should be done to prevent companies (not just blockbuster) from taking advantage of the common person (most of whom will not take the time to read the fine print).

    with that said, i have tried many of the rental options out there. while employed at blockbuster i got 5 rentals a week free which started me on my path to ripping movies. i tried netflix and had a great experience with it. no complaints what so ever (possibly because the warehouse was literally less than 2 miles away from my house and the turnaround time was 1 day). much to my co-wokers' dismay, i tried out blockbuster online after i quit. the system was a little slower (between 2-3 days turnaround), and did not have the selection of older movies that i enjoyed from netflicks. ive had the movie and game passes from blockbuster. over all, i prefer netflix. yes, a former blockbuster empolyee admiting the truth, netflix is better.

    --im the only john wayne left in this town--
    Quadratic (Senior Member) 22 February 2005 15:05 Send private message to this user   
    This is getting stupid.

    Even a half smart person would realize that their HAS to be some kind of limit on how long you can actually rent, even if late fees are "over." Technically, they are still in place, but they've renamed it. You can't keep the movie forever.
    evilthug (Newbie) 22 February 2005 20:38 Send private message to this user   
    Blockbuster is an extremely good company to work for, I have only been with them 10 months, but i have already been promoted twice and all of the people i interact with are great. The corporation is headed by smart people and they know that without us little employees and customers they would be nothing. John Antioco actually hosts an annual patrty at his ranch for all store managers who would like to attend. Furthermore, the new late fee policy is awesome compared to the old system. If someone is going to keep out a movie for more than a month they deserve to buy it! Keep in mind that on the old system, it did not charge them the amount of the movie, it just kept accrueing late fees until the item was brought back or reported lost. this often added up to three times the price of the movie! This new policy from blockbuster a revolutionary for the video rental business, and I am happy to be able to say i was employed during the switchover...however, if any major corporate people are reading this...the compass system is terrible! If you are not an employee, you would not know what this is because it only affects employees.
    evilthug (Newbie) 22 February 2005 20:44 Send private message to this user   
    an addendum to the above, the FINE PRINT as you so lovingly call it, is Posted on a sign the size of me in EVERY STORE LOCATION so if anyone is really going to concede they didnt understand the policy..it is because of their own sheer laziness to not only ask any employee, but they could also READ THE SIGN IN THE STORE...the phone works too...i probably spend 20% of my shifts...on the phone...some people are never happy.
    aabbccdd (Inactive) 22 February 2005 21:56 Send private message to this user   
    HEY i have a idea LETS END THIS THREAD iam really tired of it.
    daemonzx6 (Senior Member) 23 February 2005 16:16 Send private message to this user   
    yeah, we should end this thread.
    For the record, I saw a sign at Blockbuster dictating their actual policy, it said "Need a few extra days? ...go ahead," which is really what this new policy is. I have not however seen any big signs relating to the so titled "fine print."
    evilthug (Newbie) 24 February 2005 14:10 Send private message to this user   
    If you want this thread ended...why do you keep coming back to read it? If there is any store without a sign with the "fine print" posted it is a $500 dollar fine from corporate to that store manager. Therefore, that location you went to either has a sign that you missed, or you didnt read the fine print, you read the bold words on top and said screw reading the rest. Or that store weekly charges their store manager $500...wouldnt that be fun?
    Sickman1 (Inactive) 26 February 2005 4:48 Send private message to this user   
    ah this is so classick. this simple...if you dont like Wal-mart go to Kmart. If you dont Like Blue jeans try on Green jeans. Choices and opinions are great. but why does redudantcy(??) have to be so addictive?
    natitfj (Newbie) 1 March 2005 11:13 Send private message to this user   
    Rant

    Everyone is entitled to an opinion, which is what makes this country useless in a communist perspective. I for one have a fight against some of your opinions so flamebait me all you want.

    First off, the legal implications against Block Buster are strictly due to the false advertising that they employed on TV ads. RTFA! The FTC (.gov) has a truth in advertising law that states that all commercials advertised or broadcasted within US/FCC control must have a truth, or must be proven true advertising. Block Buster advertised “NO MORE LATE FEES”, however this is a broad statement, which does not clearly state zero fees charged for returning a video after a certain amount of time. No one saw this but the legal department of Block Buster. Block Buster was loosing rental sales against online rental business like Netflix. In retaliation Block Buster decided to offer a online rental capability, while having a prominent presents around the country (as in having storefronts) they had to enact the no late fee advertising in order to gain the revenue towards the online/offline rental sales. The current legal suit against Block Buster is due to the fact that they falsely advertised the “NO MORE LATE FEES”, and I know for sure as soon as the media heard of this case, people took opinions and facts and ‘miskeewd’ the legal case. Again someone please read the actual case argument against whatever before taking sides. This would help… prove a point.

    Next point! I agree, people should not keep a rented DVD/video for over a month, and this is where the current arguments are fighting over. People are being charged a whole retail loss cost for a movie rented and kept after a certain amount of time. This is a automated system, so the system automatically confirms that a movie has not been returned by a set deadline, then the computer system does a CC charge for the amount of the movie. However the movie is still kept in record that it is rented, then by the final day if the movie is returned before the system drops the movie from loss inventory track, the charge is charged back (reverse charge) to Block Buster. Again, there is that $1.25 ‘restocking fee’ It is still not clear as to what that restocking fee is accounting for. Would it be accounting that they have to place that DVD into another container with a active bar code? Because that would make no sense, due to the fact the computer system recognized that the movie was returned. I have other theory-based arguments on this but I’ll keep that out of this conversation. Again, people should not keep movies for a prolonged amount of time, because there is a limited order/ownership that the rental companies have of each new release.

    Who is Better, Netflix or Block Buster? That is all opinion-based arguments; people cannot fight over this statement because this is personal opinion statement. However people can fight over someone claiming a false fact. Realize that my opinion is leaning towards netflix. I prefer netflix because of the convenience, of order 3+ DVDs and they all arrive in my front door (mailbox) within 1 business day. I have no problems with this because I AM a anti-socialistic prick. America is moving towards this social trend, and if you have not realized this by now, then take a closer look at how the current marketing trend is heading, which will give you a better perspective of what American citizens want. Block Buster is a great rental outlet market, but again I am a person that socially does not want to interact with people. It is not because I could be this hideous disfigured man that is bent on ruling the world. It is because I find the majority of those around me ignorant, and just within my tastes to take a baseball bat to anyone that does a stupid thing. (Goes to show why I follow in the IT security career field, I’m a logical thinker)

    Finally, The customer/employee have the obligation to know what they are doing. Of course the business aspect of the client/business perspective knows that the customer will not ask questions and sign said statement here with out asking questions. Businesses/Corporations have a obligation to inform their customers what they are getting into. Have you ever signed a bank loan statement without reading the fine print? If you have that is your fault that when you fail to make the payments on time, or decide to stop paying, when that time comes for you to go to court, the judge rules against the person without valid reasoning. Whenever I create a SOW or RFP, or even a said contract I explain either the complete run down of the contract or I explain the actual terms of the contract to my clients. By the time they sign the contract, they firmly know the extent of the terms. This is also where anyone that in anti Block Buster needs to shove a beat stick where the sun don’t shine, because it is also the customers responsibility to understand terms whether or not they are in a hurry.

    /rant


    "Don't Forget to Salt the Fries!"
    bzboarder (Member) 3 March 2005 9:35 Send private message to this user   
    @ natitfj

    just a friendly reminder: people wont read something that long. if they wanted to read war and peace, theyd buy it.

    --im the only john wayne left in this town--

    This message has been edited since posting. Last time this message was edited on 3 March 2005 9:38

    madgreek (Inactive) 3 March 2005 10:22 Send private message to this user   
    In terms of Blockbuster Vs. Netflix, I have had both. I can tell you that in terms of effeiceny both are terrible. At least this is my expierence. Blockbuster is absoultely terrible!! They say they send a dvd on one day...but it takes 3-4 days for the movies to come. Netflix takes 1-2 days. Something tells me blockbuster lies when they say they send. I actually just signed up in the store for blockbuster movie pass. That is the best way. I also did not get disks becuase my mailman was watching them too...
    Mr_Taz_UK (Senior Member) 3 March 2005 10:40 Send private message to this user   
    Quote:
    just a friendly reminder: people wont read something that long. if they wanted to read war and peace, theyd buy it.
    yup, skipped straight over it LOL





    Even my cat hates Bill Gates !
    natitfj (Newbie) 3 March 2005 16:21 Send private message to this user   
    not of my concern... just wanted to post my opinion. I was bored at work, got a phone call from a customer looking for EIN info for BB, and I came across this thread.

    decided to post... if you read it, then great, your a bit more intelligent than the next gent. If not, maybe I was not enlightening enough.
    dorkchop (Newbie) 3 March 2005 21:29 Send private message to this user   
    To all of those in states that are considering or acting on a law suit like this, now is the time to tell those responsible to stop.Cast aside the fact that instead of paying $8.66 for a movie that is 7 days late you are only stuck with $1.25.Cast aside that you could, if you were irresponsible and rude,keep the movie a further 30 days for the same $1.25 instead of another $40 in late fees.Cast aside that Blockbuster offers three movie pass options that save you money on rentals and already offered no more late fees.Consider instead where this ignorant suit is going to end up.Either the no late fees will end, not good for the consumer, or the restocking fee will go away as well as the ability to return the movie, sticking you with the purchase price of the video, again not the best for the consumer.No good will come of this.There is no other options.You take the purchase of the movie and restocking fee options out and don't replace them with something, then Blockbuster would essentialy be selling the videos for $4.33.Obviously that's not going to happen, for they surely would go out of business.If you don't understand the no late fees policy it will be explained to you and there are brochures at the register, or will be supplied at your request.No aspect of this is hidden.The only thing hidden if you don't understand this is the functionality of yourself in society.YOU HAVE 7 DAYS TO RETURN THE MOVIE AFTER THE DUE DATE.If you can't do that then you are not intelligent enough, nor do you have the manners to not only rent a movie but function in society.These people "acting in our best interest" by bringing these law suits are not doing that.They will cost us money in the long run.For those that want to complain about how Blockbuster treats their employees, for starters that is not the issue here.Second, I have worked for both now and I can tell you as a person that hired at both, Blockbuster is twice the company that Hollywood ever dreamed of being.Someone mentioned that they knew someone that made $8 an hour as an assistant.I live in one of the poorer markets in America and made as much as an assistant at Blockbuster as I did as a Manager at Hollywood, and didn't have to work 65 hours a week at Blockbuster to do so.Furthermore, no assistant that I know makes near that amount.In fact most shift leaders don't make that little.One more on this topic, at Hollywood I hired CSR's in at minimum wage, and at blockbuster they were hired in at much more than that.As far as competing with Netflix goes, Blockbuster has their own online service which is at a better price and deal than Netflix.Your mail time should be considerably less since at Blockbuster your movies will be coming from a store in YOUR town or the closest one to it.Netflix in my area(I used to subscribe) was sent to a state a 1000 miles away.HMMMMM.Which would make it to my house first?The bottom line to all this is this:these people bringing these lawsuits against Blockbuster will end up costing you money, and will be ending a good thing that doesn't hurt anyone but the irresponsible.
    Nephilim (Moderator) 3 March 2005 22:03 Send private message to this user   
    Wow. A career video store employee managed to write all that?
    madgreek (Inactive) 12 March 2005 9:07 Send private message to this user   
    Wow man don't get crazy. This "back ups" for you!

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    ScubaBud (AfterDawn Addict) 12 March 2005 10:01 Send private message to this user   
    Here is the way to solve some of these issues:

    Forget about New Release Rentals for two days only and make all movies 7 days. Stock enough DVD’s for customers to be able to view a New release in the first week instead of having small inventories of them that force the customer to come back day after day and not find them available still, example; (Flight of the Phoenix.) And spell out completely what they meant by No More Late Fees!

    If you are going to say No More Late Fee’s then do just that and don’t charge anything for bringing in a movie late. Don’t change the language to a re-stocking fee. Are you really saying that there is a difference between placing a movie back on the shelf after 6 days or 8 days? Does it take any more muscle, knowledge, effort, manpower, equipment, machinery, whatever to place that movie back on a shelve? Of course not, so why the re-stocking fee bullcrap. It is a late fee and that’s all there is to it! Blockbuster needs their ass to get sued so they can get their wording straight. The only reason they even attempted any changes is because they are getting their shorts eaten by the Netflix and the Hollywood videos out there.



    ScubaBud
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    venomX05 (Senior Member) 30 March 2005 9:52 Send private message to this user   
    I thought that everyone should read this:

    http://www.sun-sentinel.com/business/local/sfl-zblockbuster30mar30,0,6916175.story?coll=sfla-business-front

    "WE ARE....VENOM!"


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    Nephilim (Moderator) 30 March 2005 12:02 Send private message to this user   
    I just read that in the local newspaper this morning. It serves them right.


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    venomX05 (Senior Member) 30 March 2005 12:58 Send private message to this user   
    Yes it sure as hell does...I remember read an article that Dela put up about Blockbuster, I think. And this one guy/girl was saying how lazy people were in returning movies, and blah, blah, blah, and saying that people should read the fine print about the late fees and stuff like that....so when I read this, I couldn't stop laughing. Although, I am still trying to find that thread.

    ;)

    "WE ARE....VENOM!"


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    philipman (Senior Member) 30 March 2005 18:05 Send private message to this user   
    I have allways hated blockbuster, cost too damn much compared to the local video store. Rent games for 2.00 a week.

    memorex is the best!
    venomX05 (Senior Member) 30 March 2005 18:16 Send private message to this user   
    Definately! I agree with that one.

    ;)


    "WE ARE....VENOM!"


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    forkndave (Member) 30 March 2005 19:08 Send private message to this user   
    I don't understand how anyone can say that NetFlix has no late fees. It's true that you can get your 3 movies and keep them forever if you want to. As long as you pay your $17.99 monthly fee that is. Blockbuster has an online service that probably works the same. People that this fee applies to do not pay a monthly fee. I have a Blockbuster movie pass and I can keep movies forever also as long as I pay the monthly fee. I don't do that because I like to be able to get more movies. There is an old saying that there is no free lunch. I believe that this illustrates that. No free movies either. I only use Blockbuster because they're close to my house and I don't want to fool with the mail. The main effect that I have seen from all this is that people don't bring back the movies until a couple of weeks have elapsed and new releases are very hard to get unless you are there when the store opens on Tuesday. Fortunately, I'm retired and I do this.

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    This message has been edited since posting. Last time this message was edited on 30 March 2005 22:13

    philipman (Senior Member) 30 March 2005 19:10 Send private message to this user   
    I think last time I checked Blockbuster was making you pay 7.00$ a week. They are just too damn $$$. The only time I go there is when I get a gift card to there.

    memorex is the best!
    Movies6 (Newbie) 31 May 2007 12:27 Send private message to this user   
    Ok, for the record I work for blockbuster and let me tell you i love it. Now here's how it is plain and simple if you keep a movie out for over 37 days, then you should pay for it, cause you must think that you own it to keep it out that long. And one other thing, if you rent a 2 day rental or even a 1 week rental you have 7 days after the due date to bring it back before your charged the restocking fee now personally i dont believe blockbuster inc. she suffer for a consumer's laziness to bring a movie back on time. And frankly i think they should start canceling consumer's accounts that have a record of keeping movies out late and getting restocking fees. Cause even when i didnt work for them i never had a restocking fee because im not lazy. Consumer's need to stop crying about this and deal with it.
    ScubaBud (AfterDawn Addict) 31 May 2007 12:35 Send private message to this user   
    Quote:
    Consumer's need to stop crying about this and deal with it.
    The last time anyone posted to this topic was:
    philipman (Senior Member) 31 March 2005 0:10

    I think two years is plenty of time to stop crying. Now Movies6 next time just read the date on the last post before you respond. :)
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