Redbox sued for 'illegal' multi-day rental fees
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.
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| Submitted by: | doug Gordon (doug@edgevideo.net) 10/29/2009 2:01:29 PM PT |
| Location: | new england |
| Occupation: | indie store owner |
"Redbox said today that it won't comment on pending legal action."
Wow, there are several other legal actions they LOVE to talk about. They
even set a website for them. I guess it depends on which side of the
courtroom they are on.
| Submitted by: | Dan 10/28/2009 12:49:17 PM PT |
What is most interesting is that someone is leading a class action lawsuit
based on $50 worth of fees - or two occurrences. I use Redbox, and find
it to be very fair. Perhaps the problem is that Redbox isn't charging
enough. At $1 a day, the customer in question doesn't seem to be taking
the agreement seriously (it's only a dollar!), so they don't worry about
returning the movie on time. But when they need to live up to their end of
the agreement, its a class action lawsuit. So much hubbub for renting
Fools Gold.
| Submitted by: | doug Gordon (doug@edgevideo.net) 10/28/2009 11:19:03 AM PT |
| Location: | New England |
| Occupation: | Movie Lover |
They say no late fees and then charge one if your late. Sounds like a good
case to me.
If you rented a car, that was advertised, "FREE MILEAGE", but because it
said something different in the nine page rental agreement, they charge
you for "Fuel Reimbursement stocking fee", would that allright too?
Just change what you call it and you screw the consumer???
This is going to interesting case.....
| Submitted by: | Grumpyone 10/28/2009 10:56:33 AM PT |
| Location: | Texas |
| Occupation: | Consumer |
I don't get where the "illegal penalty" comes in. The terms (contract) clearly state that you will be charged $1 per (24 hour) rental period. How this translates in the claimants suit as an illegal penalty escapes me. It's the same as the power company or cell phone provider assessing late charges for not paying on time. If the claimant wins this, I wonder if they then sue everybody else who tacks on late charges. Wouldn't that be nice.
| Submitted by: | anonymous 10/28/2009 7:24:42 AM PT |
| Occupation: | purchasing manager |
Not sure why the law suit. A $1 per night is a $1 per night. If the video is kept longer than 9pm the next time, that falls under the second night. Clear and Simple. Return it on time or get charged for the second night. The machine doesn't know you aren't keeping it a second night. Be smarter than the machine and return it before 9pm!
I can't seem to find it now (may have changed due to law suit)...however, I have seen it stated some where that they do charge $25 for a video that is not returned. A HUGE incentive to return it.
Always read the fine print before you agree to anything.
Under Red Boxes TERMS OF USE...
Media Rentals.
When you rent media from our Kiosks (an "Item"), you will be charged the applicable rate per Item (the "Rental Charge") plus tax, if applicable, for the initial Rental Period (as defined below). Subject to the terms below, you can keep the Item as long as you like and return it to any of our Kiosks. You will not be charged any additional Rental Charge if you return the Item to any of our Kiosks prior to 9:00 p.m. (local time), except as otherwise provided at certain Kiosk locations, on the day following your date of rental (each such period is referred to as a "Rental Period"). If you return the Item at any time after the 1st Rental Period, you will be charged the Rental Charge plus tax, if applicable, for each additional Rental Period that you keep the Item. If however, you do not return an Item within the maximum rental period (which varies from item to Item) you will be charged the "Maximum Charge" (which varies from item to item), from which we will deduct your first night's rental but will charge you any applicable taxes. In such an event the Item is yours to keep. In the event you use a valid and unexpired promotional code provided by us when renting an Item from our Kiosks, the specific terms of the promotion associated with such promotional code will govern your rental.
For example, if you rent an Item prior to 9:00 p.m. on Monday, you will be charged the Rental Charge plus tax, if applicable, at the time of the rental. If you return the Item prior to 9:00 p.m. on Tuesday, you will not be charged any additional Rental Charges. If you return the Item after 9:00 p.m. on Tuesday, but before 9:00 p.m. on Wednesday, you will be charged an additional Rental Charge plus tax, if applicable, for the one additional Rental Period that you kept the Item. If instead you return the Item after 9:00 p.m. on Wednesday, but before 9:00 p.m. on Thursday, you will be charged an additional 2 Rental Charges plus tax, if applicable, for the two additional Rental Periods that you kept the Item.
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