Peter C. Harvey, Attorney General

Division of Consumer Affairs
Reni Erdos, Director

For Immediate Release:
May 17, 2004

For Further Information Contact:
Genene Morris, Jeff Lamm
973-504-6327

NEWARK - Best Buy Stores, L.P., a Minnesota-based retailer of electronic products, personal computers and appliances, has entered into an agreement with New Jersey to ensure its advertisements comply with state laws and to follow certain procedures aimed at resolving consumer complaints, Attorney General Peter C. Harvey and Consumer Affairs Director Reni Erdos announced today.

Under the terms of the agreement, called an Assurance of Voluntary Compliance (@AVC@), the company will also pay the State $133,500. Out of that amount, $125,000 will be applied to cover future Consumer Affairs' initiatives, with the balance to cover costs. Best Buy is based in Minneapolis and operates 17 retail stores in New Jersey.

The AVC stems from an investigation by Consumer Affairs into more than 200 consumer complaints alleging the company engaged in deceptive advertising, failed to have advertised merchandise available for sale, and failed to honor rebates and warranties. The company has not admitted any wrongdoing.

"This agreement puts in place important measures that Best Buy must follow to address consumer complaints and alleged violations of state laws," Attorney General Harvey said. "We have demanded appropriate steps to ensure that consumers are not deceived or harmed by unlawful business practices."

"Merchants have a responsibility not only to law enforcement officials, but to their customers, to adhere to rules and regulations that govern their business practices," Director Erdos said. "We are serious about our responsibilities and expect merchants to be serious about theirs, too."

As part of the AVC, the company has agreed to comply with the State's advertising laws by, among other things:

• specifying in each advertisement, and in close proximity to the advertised item, any special or limiting factors relating to the item's price, quality, condition or availability;
  
  
• refraining from utilizing any type, size, location, lighting, illustration, graphic depiction or color that obscures any material fact regarding any condition of a sale item; and
  
  
• clearly disclosing in its advertisements any limitations on Best Buy-originated rebate offers.

Also under the terms of the agreement, Best Buy must work to resolve existing as well as future consumer complaints.

Specifically, Consumer Affairs will forward a list to Best Buy identifying all existing consumer complaints. Best Buy must send a written response to each consumer within 30 days and submit written proof to Consumer Affairs of any restitution payment or other measures taken to resolve the complaint. Any unresolved complaints will be referred to Consumer Affairs' Alternative Dispute Resolution Unit for binding arbitration. In addition, under the terms of the agreement, Consumer Affairs will continue for a one-year period to forward new consumer complaints to Best Buy for resolution in accordance with these procedures.

If Best Buy disputes any existing or future complaint, the company must provide Consumer Affairs with a written response as well as copies of all documents concerning its dispute of the complaint.

Deputy Attorney General Nicholas Armstrong of the Division of Law handled this case for the State.