Avoiding a cash payout, Blockbuster agreed to amend its privacy policy to settle a class action suit alleging violations of the Video Privacy Protection Act.

Under the VPPA, video service providers must destroy customers’ personally identifiable information “as soon as practicable, but no later than one year from the date the information is no longer necessary for the purpose for which it was collected.” The class action brought by Baseem Missaghi alleged Blockbuster maintained information in violation of the Act and created a “digital dossier” of customers.

But unlike the $9 million Netflix agreed to pay to settle similar suits, Blockbuster will not make a cash payment to class members. The company agreed to pay administrative costs of the settlement, $750 to named class members, and up to $140,000 for class counsel.

Instead of a cash payout, the company agreed to change its practices and update its privacy policy. Specifically, the company will inform customers that accounts are continuous unless affirmatively terminated, provide information to customers about how to terminate their accounts, and honor the requests of former customers to separate or “decouple” their rental history from their personal information.

According to the plaintiffs’ motion for preliminary approval, the settlement provides the class “immediate, industry-leading injunctive relief,” and preserves class members’ claims for damages if they choose to pursue those separately. Blockbuster denied the allegations of the complaint and has argued that it could not be liable for monetary damages under the VPPA because it purchased the personally identifiable information at issue “free and clear” from all claims and encumbrances through a judicially approved bankruptcy sale.

U.S. District Court Judge John Tunheim in Minnesota granted preliminary approval to the settlement. A final approval hearing is set for Nov. 27.

To read the proposed settlement in Missaghi v. Blockbuster, click here.

Why it matters: The suit against Blockbuster was just one of a spate of VPPA cases filed over the last year. In addition to the Netflix settlement, Redbox, another video service provider, recently scored a victory in a VPPA class action. In that case, the 7th Circuit held that consumers cannot recover damages under the Act when a business keeps their rental histories longer than allowed by law.