Following Blockbuster's plan to drop late fees in favor of a longer grace period and then a large lump charge for "buying the movie" if you waited too long to return the film, New Jersey came along and sued Blockbuster for being misleading about its "no late fees" marketing slogan. Apparently, 46 other states jumped on the bandwagon and sued as well. Sensing trouble, it appears that Blockbuster has given in and will pay up a fine, refund fees paid and change their marketing program away from the "no late fees" claim. It still seems like Blockbuster had a valid claim here. A late fee is a "punishment" fee for returning a product late. Blockbuster wasn't punishing customers, but simply assuming that they were buying the video in question. In other words, people were getting something in return for those fees -- not just randomly charged.
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