Bankrupt Hollywood Video has agreed to reign in collectors who allegedly were strong-arming consumers over disputed fees.
Movie Gallery Inc., which operated the chain, filed for bankruptcy in 2010. That’s when customers began to complain about what they claimed were strong-arm debt collection agencies seeking allegedly unpaid late fees and product fees.
According to the office of Maine Attorney General William J. Schneider, consumer protection officials across 50 states fielded complaints from among the 3 million patrons of Hollywood Video.
In their complaints, customers told officials that the alleged fines were not owed, that they were larger than the late fees that could have been incurred, and that Hollywood Video’s collectors were reporting them to credit bureaus before informing them of the debt or giving them the opportunity to challenge the amounts.
In a new settlement, the company has agreed to rescind outstanding adverse credit reports and to allow customers the chance to dispute any collection claims. When it comes to late fees and product fees, the company has also agreed to seek only the lesser amount, if more than one debt is alleged. The company will not charge interest or collection fees on the money it is trying to recoup.
“Debt collection and resulting credit reports can have a serious impact on consumers,” Schneider said. “It is very important that debts are collected in a fair and legal manner. This agreement provides immediate consumer relief from improper collection practices.”
According to Schneider’s office, the agreed-upon terms will be transferred to any collectors who might buy the customer accounts in the future.
Consumers who have complaints about a Hollywood Video account should contact their state attorney general. They can also contact Hollywood Video directly at: Movie Gallery, Inc., Hollywood Entertainment Corp., 7405 SW Tech Center Drive, Suite 130, Tigard, Oregon.