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A 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.
Updated February 14th, 2010
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14 thoughts onHollywood Video Debt Collection Class Action
Saturday, June 9, I received a letter from A.R.M Collections saying I owed almost $38. for not returning two videos in 2010.
I ALWAYS returned videos that I rented. I am 60 yrs old and cannot afford to pay this fraudulent charge. I work hard to keep my credit in good standing and am lived that they can just make this up and say I owe them. I am going to the Attorney General Monday morning. THANK YOU for all your comments so I know I am not the only one being scammed.
Oh and to prove Universal Fidelity knows nothing about Hollywood Video the person I spoke with on the phone told me that Hollywood Video did not give employees free rentals… we got 3 rentals at a time free of charge and all we had to do was return it on time and then check it out again.
I just received a call from Universal Fidelity saying I owe over $200 in late fees. I was an employee up to the day they closed my store and I had to return my rentals to a store 20 miles away when they closed my store with less than 12 hours notice. I know for a fact that HV had no way to actually record if a rental was returned to a different store because each store has its own inventory. When customers from other stores would return their rentals to us we would just stick them in a box and took no info on who returned it or what store it came from. Now 2 years later these douches call me and and tell me I owe money because HV had no plan for how to record their returns once the store was closed. This is a scam to bully people into paying them by messing with their credit score. Well I am going to fight this any way I can!
As a former Hollywood employee, up until they closed down, I can guarantee that no customer would have been renting anything with a $100+ bill of late fees without having had to pay something on it. On that note I also received a bill for a game I had rented before my employment, and one from early in my employment. Considering i got free rentals being an employee, a privilege that was revoked if I had late fees until they were paid. There is definitely something wrong here
These lunatics contacted my 85 yr. old mother also with a $50.00 bill for videos that she returned and some were listed that she never even rented. I hope that there is a class action lawsuit pending in California. How can I find out if there is one started?
I received a letter from arm solutions in Feb of 12 stating i owed 60$ from movies that were late and I honestly havent even seen half the movies on there and I was the only person in the home. I went ahead and paid the amount, I tried to deal with them and the lady I spoke to automatically cut my debt in half so I next asked if I could pay 25% and got turned down, I hung up called a few days later and tried to deal he offered me 75% of the balance, so I explained I knew he could do more since I was offered 50% last time, I went ahead and paid off what came to be 28$ and am still angry over this charge… Please let me know if anyone gets reimbursed for this scam just didnt want it on my credit!!!! I cant believe these charges were from 2 years ago that I supposedly owed them..
I also received a letter of collection but from Universal lFidelity oweing $25.52 for 4 movies in 2009 & 1 Xbox game in 2010. the kicker is I purchased a program of a flat fee of like $15.00 per month for no late fees and you could rent 3 movies at a time. Hollywood Video continue to deduct this money from my account even after they stopped renting movies. I was told by the locate store and their customer service that I had a credit of $75.00 that I would be reimburse for. now 2yr’s later I know owe them. I dont think so. this must be a scam ! ! ! ! I will be contacting the attorney general office & the locate NEWS channel ! ! ! ! ! !
I just received a scam letter also. The pain is now having to verify with the 3 credit report bureaus that they are not showing “collections” on my records.
I also received a collection letter from A.R.M. SOLUTIONS dated 12/27/11 with charges of $76.33 for six movies, the dates on these were from 2/3/09 to 12/23/09. I also went to their store which was only approx.1 block from my home when they were closing and my account had a 0 balance.
I was always contacted when I was late more than 3 – 5 days and always informed of any late charges when wanting to rent another movie so I don’t understand where the months between rental dates come in to play.
I have noticed online that there have been many complaints of collection scam claiming that they represent HOLLYWOOD VIDEO.
I would also like to know of any class action suit against this collection agency, 24 months is quite a long time before notifying anyone of a past due bill.
Any help would be appreciated, Thank You
iI JUST RECEIVED A COLLECTION LETTER FROM A.R.M SOLUTIONS SAYING THAT I OWE HOLLYWOOD VIDEO LATE CHARGES FROM 2 YEARS AGO 10 MOVIES I DOD NOT OWE THEM ONE CENT I WAS IN THEIR SYORE WHEN THEY WHERE CLOSING AND IF I OWED THEM $132.24 THEY WOULD NOT HAVE LET ME RENT ANY MOVIES WHEN I WAS AT THEIR STORE LAST TIME I RENTED MOVIES I OWED NOTHING WHY 18 MONTHS LATER IAM GETTING YHIS LETTER PLEASE LET ME KNOW WHAT MY LEGAL RIGHTS ARE AND IF THERE IS A CLASS ACTION LAW SUIT IN THIS MATTER