Sarah Mirando  |  February 14, 2011

Category: Legal News

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Hollywood Video Debt Collection Class Action
By Mike Holter
 

Hollywood VideoA federal class action lawsuit in New Mexico claims National Credit Solutions, the company that bought the accounts receivable from bankrupt Hollywood Video, is using illegal tactics to “strong-arm” more than 500,000 Hollywood Video customers into paying excessive collection fees and disputed debts they may not even owe.

 

Hollywood Video (also known as “Movie Gallery” in some areas) filed bankruptcy in February 2010 and closed its remaining stores that summer. All of the alleged debts owed to Hollywood Video were purchased by and/or turned over to National Credit Solutions (NCS) for collection, which made no attempt to notify consumers of the charges or made any effort to verify the debts actually existed, says the class action.

 

“According to an interview with the owner of NCS, Brett Evans, the company simply ‘dropped’ collection notices in approximately 500,000 credit files. NCS never notified any of these persons that it had placed unverified and negative information in their credit files. Moreover, NCS reported these unsubstantiated debts to the three major collection agencies,” states the NCS class action lawsuit.

 

It was only when consumers tried to apply for mortgages, home refinancing and other transactions requiring credit that they became aware that NCS had wrongfully reported they were subject to collection of an outstanding debt. Many of these consumers, the class action continues, remain unaware that they allegedly owe debts to Hollywood Video, that their alleged debts were turned over to and/or purchased by NCS, and that NCS reported these unverified debts to all three major collection agencies, the class action lawsuit says. 

 

When consumers contact NCS about why the company has placed negative information in their credit file, NCS tells them they had an outstanding debt arising from late charges for movie rentals from Hollywood Video and that the negative information can be removed from their credit report if the consumer agrees to pay the outstanding debt plus a $75 collection fee. 

 

The NCS/Hollywood Video class action lawsuit is brought on behalf of all New Mexico residents who had negative information placed in their credit report by National Credit Solutions, LLC based on alleged debts owed to either Hollywood Video or Movie Gallery. It is seeking damages and attorneys’ fees and court costs.

 

A copy of the National Credit Solutions/Hollywood Video Debt Collection Class Action Lawsuit can be read here. 

 

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Updated February 14th, 2010

 

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14 thoughts onHollywood Video Debt Collection Class Action

  1. Laura Hersh says:

    They are still coming, this is just ridiculous. I don’t owe, and to say I owe money for a video I had purchased elsewhere is rather annoying. I hate they can do this, the rental was supposedly in July 2009!! How are they getting away with this?

  2. Anonymous says:

    I am furious! Just received a notice in the mail from ARM that I owe money supposedly to Hollywood video from over 2 years ago!!!!! I am completely shocked that i was sent to collections and was NEVER notified. What can I do? I am a young student who has been working hard to create a great credit score and now it is all going down the drain because of Hollywood Videos mistake??

  3. Anonymous says:

    I was surprised to receive a letter form the collection agency requesting payment for a past due debt. I returned the movie to the HV store as it was going out of business and liquitidating and selling all of the titles in the store. I dont think we should have to pay for their sloppy accounting and inventory practices at the time of the store closing. And what happened to all the movie credits myself and others had. Shouldnt we be reimbursed for the prorated amount. They took our money before closing but yet have never notified me of any credit. But two years after the fact they have a good enough accounting mechanism to say I still have a movie outstanding? I am not going to accept this and have to search ways to counter it.

  4. Anonymous says:

    It is Tuesday June 20th 2012 I have just received a letter from Universal Fidelity claiming I owe $33.53 in unpaid fees for videos I rented from Hollywood Video in 08/15/09 and another 06/10/09, however like we all know if you have a rental that hadn’t been returned you weren’t allowed to check another out without first returning the missing one and paying your late owed fee at time of rental for the new video. Not to mention when we were last in Hollywood Video we had them close our account due to the fact we did not ever rent from them in the case some one ever took our card in a wallet theft. So we were more than surprised to say the very least to find a bill stating we owe them anything when our account had been supposedly closed three years already. We not only had never heard from Hollywood video when they were open of any erroneous charges but were falsely solicited for money by a company putting good people who literally “owe” nothing illegally into collections.

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