Redbox sued for 'illegal' multi-day rental fees
PHYSICAL: Claimants say kiosk operator wrongly collected $100 million
By Danny King -- Video Business, 10/27/2009
OCT. 27 | PHYSICAL: Redbox is the subject of a class-action lawsuit from customers who say the largest U.S. operator of movie-rental kiosks has illegally collected $100 million in fees from people who rented movies for more than one day over the past nine years.
Redbox kiosks charge $1 a night for DVD rentals.
The Coinstar unit has violated its claim that it doesn’t charge late fees by charging an additional $1 for DVDs that are returned any time after the 9 p.m. deadline after the initial 24-hour period has expired, according to the claim that was filed in an Illinois Circuit Court. Additionally, Redbox’s $25 charge for DVDs that are never returned is illegal because the price exceeds the typical cost of a new DVD, claimants say.
“While it boasts ‘easy $1 a night DVD rentals’ ‘with no late fees…ever,’ that is not the truth,” the filing reads. “Instead, Redbox charges its customers who return a movie even one minute late a late fee in the form of an illegal penalty.”
Redbox said today that it won't comment on pending legal action.
The lawsuit puts Redbox in the new position of being a defendant instead of a plaintiff in a legal tussle. Redbox has lawsuits against Warner Home Video, 20th Century Fox Home Entertainment and Universal Studios Home Entertainment, all of which have taken issue with Redbox's $1 a night rentals and are prohibiting the sale of their new DVD releases to kiosk operators such as Redbox until at least four weeks after their street date.
Redbox sales have exploded in recent years as movie-rental chain store operators such as Blockbuster and Movie Gallery have shut down unprofitable units. Coinstar said in August that Redbox’s second-quarter sales doubled from a year earlier on both more machines and a more than 30% jump in revenue per machine. Redbox doubled its kiosk count to almost 18,000 in the past year.
The class-action lawsuit is led by Laurie Piechur, a resident of Illinois’ St. Clair County who was charged $25 each for 27 Dresses and Fool's Gold DVD rentals because she didn’t return the discs to a Redbox machine, according to the filing.
