For "No Late Fee" Program Announced
March 30, 2005
The Attorneys General alleged
that the advertising campaign was misleading because it failed
to clearly and conspicuously disclose key elements of the program.
If a consumer kept an item out for more than seven days after
its due date, the consumer was charged for the selling price
of the video. If returned within 30 days, the selling price was
refunded, but the consumer was charged a "restocking"
fee of $1.25, or higher, at some
"Advertisers must be aware that that they have an obligation to avoid misleading slogans," said Nordstrand. "Slogans can be misleading and violate state law if they do not clearly and accurately describe the complete terms and conditions attached to their offers. Blockbuster stores in Alaska took steps to advise customers that the Alaska stores were not participating in the promotion and why. The owners of Blockbuster in Alaska fully cooperated with the department of law. "
Blockbuster began advertising the "The End of Late Fees" and "No Late Fees" on December 15, 2004, with the program starting on January 1, 2005. The program is available at all company-owned stores and those franchise stores that chose to participate. There are 17 Blockbuster franchised stores in Alaska owned by Boarder Entertainment. None of them ran the "No late fees" promotion.
As part of the settlement,
which Blockbuster entered into without any admission of wrongdoing,
Blockbuster will pay the states a total of $630,000 for attorneys'
fees, costs of investigation and consumer protection.
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