Hollywood video storeA trustee for the now-bankrupt Hollywood Video and Movie Gallery chains has agreed to repair the credit reports of millions of consumers to settle allegations of misconduct by debt collectors hired to collect on the rental chains' accounts, according to a settlement announced by the attorneys general of all 50 states and Washington, D.C.

After the video rental chains went bankrupt in 2010, a liquidating trust hired debt collectors to collect an estimated $244 million in outstanding debts reportedly owed by 3.3 million former customers. It was then that states started getting consumer complaints from former customers over fees and damaged credit -- with many claiming they didn't owe the money in the first place.

"Collection laws require that consumers have a chance to pay or dispute their debts," said Washington state Assistant Attorney General Mary Lobdell in a statement. "But starting in October, we received a flurry of complaints from Washington residents who told us they didn't owe the fees or were never informed of these debts before they were reported to the credit bureaus."Under the settlement, First Lien Term Lenders Liquidating Trustee agreed to:
  • Rescind all negative information submitted to any credit agency or bureau related to customer accounts and not submit any future credit reports.
  • Not collect any fees or interest charges that were added to the principal debt amount.
  • Not bill customers for both a late fee and the full price of items that were supposedly not returned. For accounts that include both a late fee and a charge for a damaged, late or never-returned product, the collection agency will only pursue the lesser charge.
  • Comply with the Fair Debt Collection Practices Act.
  • Assist the states in any effort to recover collection fees that were improperly paid by customers.
Consumers do have rights under the Fair Debt Collection Practices Act -- debt collectors are not allowed to harass or threaten a consumer. They also have to send a written validation notice within five days of first contacting the consumer that includes the amount of the debt, the creditor's name and what to do if you think you don't owe the money, said the U.S. Federal Trade Commission.

The Western Pennsylvania chapter of the Better Business Bureau also offers the following steps to take if you do not owe the debt that someone is attempting to collect from you:
  • Don't ignore the collector, who could continue to contact you or file a judgment.
  • Don't claim a debt that isn't yours or make a payment. That could affect your credit report.
  • Dispute any mistakes.
  • Be wary of possible identity theft. A call from a debt collector could be a sign your identity was stolen.

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Hollywood Video (http://www.facebook.com/hollywoodvideocom)Worst place I've ever been. Rented a game which sucked and returned it to them the same day and they saw me put it in the drop box just for them to lose it and blame me for not turning it in and trying to charge me a late fee which I dealt with the manager at the store and contacted the ones I was told to call and they said it was resolved and so I cut my card right infront of the manager and said I will never rent from here ever again and got my receipt that said a balance of $0.00 which was about roughly 2-3 years ago and now I get a call saying I never turned it in nor called and since its been this long I already trashed the receipt and now I have them calling me about a debt that I owe which I had dealt with a long time ago so I will never recommend this company and I will be filing a report with the BBB and contact them again and try to deal with this BS they are putting on me. DO NOT I REPEAT DO NOT EVER RENT FROM THIS COMPANY!!!

September 11 2012 at 10:54 PM Report abuse rate up rate down Reply
1 reply to gazbang1's comment
Brooke Jeff AndJeffr

We are going thru the same thing! We got a collections letter for 3 games that we returned over 3 years ago! Bull ****!

November 29 2012 at 2:22 PM Report abuse rate up rate down Reply