BMG settles suit by offering discount vouchers for CDs - May. 16, 2005

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CD club settlement means 75% off
BMG to give vouchers good for discount off a disc to eligible members of settlement class.
May 16, 2005: 1:13 PM EDT

NEW YORK (CNN/Money) - BMG Music Service has settled a class action lawsuit related to its shipping and handling charges by offering a deep discount on as many as two CDs, according to the settlement statement posted on the company's Web site.

Members of BMG who paid shipping and handling charges for delivery of club items between June 14, 1998 and Feb. 1, 2005 qualify for vouchers worth 75 percent off the regular club price of a BMG CD.

BMG members who have not yet fulfilled their contractual commitment to the music club will receive a voucher for 75 percent off the regular club price of one CD while those who have already purchased the requisite number of CDs will receive a voucher for 75 percent off two single CDs, according to the settlement.

Shipping and handling charges will be waived for CDs obtained with the vouchers.

A spokeswoman for BMG said the company does not comment on litigation and could not comment on how many members are affected by the settlement or the club's total membership.

In August 2004, a suit was filed against BeMusic, a BMG music club, claiming that the music company engaged in deceptive, misleading and unfair marketing and sales practices in regard to its shipping and handling charges and its advertised cost to consumers of its CDs.

BMG operates a music service in which members receive a certain number of free CDs provided they buy one CD at regular price within a year of joining the service. Members must pay shipping and handling for all of the CDs, including the free ones.

According to the settlement, current members will be mailed claim forms while non-members who qualify must obtain and submit the claim form on their own. The form can be found on the company's Web site at www.bmgmusic.com.

BMG Music Service is a part of BMG Direct, which is a unit of Bertelsmann AG.

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