If you haven't already figured this out, Blockbuster's new marketing campaign that promises "the end of late fees" is totally misleading. In fact, the state of New Jersey has just launched a lawsuit against the family-friendly video rental chain. Says the Garden State's attorney general:

Blockbuster boldly announced its "No More Late Fees" policy, but has not told customers about the big fees they are charged if they keep videos or games for more than a week after they are due.

The late fee he's referring to is the sale price of the movie that Blockbuster will charge you if you bring the thing back, er, late. Late in their books means 7 days after the end of the rental period.

I asked a sales clerk at the Blockbuster store at Queen and Spadina today to confirm this. It's true. There are no signs in the store that spell this out, but the somewhat apologetic guy didn't try to withhold the truth. It even says so on the Blockbuster web site:

If you still have a movie or game seven (7) days after the due date shown on your receipt, we will convert your rental to a sale. The movie or game will be sold to you at the selling price in effect at the time of rental, which is either the retail price, or, when available, at the previously-rented selling price, less the initial rental fee you paid.

The issue here is clearly consumer deception. With the advent of online DVD rental services like Zip.ca and Netflix who truly offer no late fees, Blockbuster is trying to come across as being in the same camp. But they're not. They're totally misleading consumers. We should all be contacting our local Consumer Affairs office to complain.

Dave Stewart, the President of Blockbuster Canada explains what they're offering in this press release:

"The end of late fees signals a fundamental change in the way Canadians experience Blockbuster. Canadians can now watch and play their favourite movies and games in a far more relaxed and enjoyable way than ever before. Now, they don't have to worry about getting their movies and games back right on time. What we've eliminated is the stress involved with rushing to return the movie when you're not ready. So, if our customers' plans change, and they don't have time to watch the movie or return it on time, they can relax and take an extra day or two."

Uuhh. Whatever.

Incidentally, I spoke to someone at Queen Video about this. They had some harsh words to say about Blockbuster. They also revealed they have no plans to stop charging late fees. Looks like that benefit will be confined to online outfits like Zip.ca and Movies For Me for now. Despite what you may have heard.