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N.J. busting vidtail titan

State claims Blockbuster promotion violates laws

NEW YORK — The state of New Jersey has sued Blockbuster Video, claiming that the vidtailer’s new “no more late fees” policy is deceptive.

Lawsuit alleges that the new fee scheme carries hidden charges and violates the state’s consumer fraud laws. Other states are investigating whether to take similar action.

Charges come at a delicate time for Blockbuster, which is trying to convince Washington that it should be allowed to buy its chief rival, Hollywood Entertainment, despite antitrust concerns.

According to Blockbuster’s no late fee policy — which went into effect Jan. 1 — customers are given an extra one-week grace period by which to return a rented item. If the rental isn’t returned, consumers are automatically charged for the going price of the rental.

Blockbuster said New Jersey Attorney General Peter Harvey’s claims are without merit and that the terms of the new policy are clearly spelled out.

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