Michigan Attorney General Mike Cox and the Attorneys General of 46 other states plus the District of Columbia have reached agreement with Blockbuster.
They will settle allegations that it misled consumers in the advertising of its “No Late Fee” program. In addition to changing its advertising practices and offering customers refunds, Blockbuster will pay the states a total of $630,000 for attorney’s fees, costs of investigation and consumer protection.
“It’s important for businesses to be truthful in their advertising to Michigan consumers,” Cox said. “Customers should not have to search for the real price hidden behind catchy slogans and disclaimers.”
The Attorneys General alleged that the advertising campaign was misleading in three respects. First, it failed to clearly and conspicuously disclose that consumers who return a rented video or game more than seven days after its due date are charged the selling price of the item. Second, if the consumer chose to return the item, a “restocking” fee would be charged. Third, there was insufficient disclosure that the program was offered only at participating stores, resulting in customers at nonparticipating franchise stores thinking they would not be charged late fees.
Blockbuster began advertising the “The End of Late Fees” and “No Late Fees” on December 15, 2004, and the program started January 1, 2005. The program is available at all company-owned stores and those franchise stores that chose to participate. There are 167 company-owned stores and 22 franchise stores in Michigan.
murdok | Breaking eBusiness News
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