Debt Collection Company Says I Owe Hollywood Video Money

Hollywood Video saw its end credits roll last year, but that apparently hasn’t stopped a debt collection company from tracking down old late fees on behalf of its impaled zombie corpse.

Tim says he and others have received outrageously high-dollar invoices from a debt collection company. He writes:

Turns out, they believe that my share of these fees is $142.71. What I find amusing is that when Hollywood Video still existed in my area, I was a member of their Powerplay program. One of the highlights of the program was no late fees. Many others are claiming that their charges are bogus as well. I am currently putting together a debt verification letter to send to them as soon as possible.

I have yet to check my credit report, but some of the others only found out about the charges after they found them on their reports. Many victims never received phone calls, letters, or any other contact, yet (the company) still illegally reported these items to credit bureaus. There are also reports of their representatives misleading and even outright lying to anyone calling to ask about the charges. One specific example is someone being told that they personally would have to show proof that they returned every video on time. They are using classic scare tactics to get as much money as they can out of unknowing consumers.

If you’ve received a Hollywood Video late fee invoice from a debt collection company, let us know about it.

Comments

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  1. C. Ogle says:

    Hollywood owes me around $43 for continuing to bill for their Powerplay rental service for a month after they were out of business. I would like to find out who runs this debt company so I can get these deadbeats to pay *me* back.

    • dwtomek says:

      I like your style.

    • Scuba Steve says:

      I’m sure your request is tongue in cheek, as regular consumers are on the very bottom on the totem pole when it came to getting paid out what was owed to them by a bankrupt company. These Debt collectors simply paid Hollywood Video the right to collect the debt. Hollywood video sold them a huge collection of names and addresses and a spreadsheet of amounts owed with some signatures sprinkled in, and said, “here you go”. They paid very little for this stuff.

    • common_sense84 says:

      Why didn’t you do a chargeback?

    • HippieLawChick says:

      You should contact your state’s consumer protection bureau, or the Federal Trade Commission to investigate this.

  2. Loias supports harsher punishments against corporations says:

    I wonder if debt collection companies could even successfully run a business if they were always honest and followed the law.

    • billtgh says:

      Incredibly enough, debt collection agencies do purchase debt from companies that go bankrupt. That debt is still legally collectible.

      • The Porkchop Express says:

        some of the other actions the OP listed are illegal though. So, while the debt may be legitimate and legal, the company/employees of the company have acted…illegally.

  3. oldwiz65 says:

    When have Debt Collection agencies, especially bottom feeders, ever paid any attention to any consumer protection laws? They know perfectly well that lots of people will simply pay to prevent bad things from happening to them, aka extortion.

    If any government agency goes after them they simply go out of business and start a new company and continue.

  4. Kibit says:

    My brother had issues with them over a movie that was returned in their drop box. They claimed they never received it and we claimed that they did. (I was with my brother when he returned it) The weird thing was that my brother did not hear from them about the movie until 8 months after he returned it.

    • raydee wandered off on a tangent and got lost says:

      I worked video rental for about four years–a Mom’n’Pop sort of local business.

      If I had a dollar for every time someone swore themselves blue that they had returned a movie–but we only had the empty case–I’d have a lot of dollars by now. Not saying that’s what happened here, but it happened quite frequently.

  5. Blueskylaw says:

    They will let a $10 late fee fester for a few years until it balloons to $500 with penalties and interest and then make believe that they are the good guys by saying they are willing to settle for a measly $250.

  6. Gravitational Eddy says:

    As has been said here before, call your legal representative (lawyer) and start a documented request for proof of the bill. If they cannot or will not provide that proof, threaten them with court action over illegal collection practices.
    It may cost you a fee, but lawyers are worth it sometimes. Then again, you might have a small claims court case.

    • WoollyMittens says:

      The lawyer will cost you $600 dollars.

      • donjumpsuit says:

        Then your debt will be repackaged and sold to another company, which will start the process over again.

        • Shaggy says:

          This. My wife and I have had this “rogue debt” following us around for years. Every time a collection agency calls us, we ask for two things: provide us with proof that we actually owe the debt, and direct all further communications to our lawyer.

          Every single time, without fail, the collections agency sells our debt to another agency and we never hear from them again. Six or eight months later, the new agency calls us…rinse, lather, repeat.

          • varro says:

            My bankruptcy clients see this happen – creditor sells the debt to a collection agency, debt is discharged in the bankruptcy,then collection agency 1 sells the debt to agency 2, even though the debt is worthless.

            • MrEvil says:

              Some people just suck at gambling I guess. Because that’s what these dirtbags are gambling on. They’re gambling on your ignorance of consumer protections, they’re almost as bad as organized crime and in some cases just as bad.

              • BBBB says:

                Some people just suck at gambling I guess. Because that’s what these dirtbags are gambling on. They’re gambling on your ignorance of consumer protections,…

                No, they don’t suck at gambling – the odds are in their favor. They know from experience what percentage of people can be convinced to pay and how much (some the full amount demanded and most at the discounted “deal.”) They pay very little for the debts and add on lots of fees/penalties.

                Change that to “They’re preying on your ignorance of consumer protections or they wear you down until you just pay to get the series of collectors to stop.”

          • Me - now with more humidity says:

            Is anyone else utterly fed up with the whole “This!” meme? It was amusing the first thousand times. Now, it’s just lame.

      • Me - now with more humidity says:

        Only 10 posts to hit our first utterly clueless poster. Congrats!

    • FDCPA expert says:

      No. Fair debt lawyers shoul work on contingency and charge debt collector for their legal work.

  7. Supes says:

    Which means it was scanned as returned, then likely stolen off the rack.

    And 8 months later someone finally asked a clerk for it, they went to look for it, realized it wasn’t there, and blamed the last person who rented it.

  8. Cosmo_Kramer says:

    Where’s the first part of the letter? Hard to tell what he’s talking about when it starts off with “…these fees” with no antecedent.

  9. The cake is a lie! says:

    The problem is that debts are bought and sold all the time. The collection company you are dealing with very well could have bought it from another collection company who bought it from one who obtained it from Hollywood originally.

    The really nice thing about collection law is that they have to be able to prove you owe the debt. proving they bought the debt from Hollywood or some other collection firm isn’t good enough. They would actually have to obtain the proof from Hollywood that you incurred the debt. Since it isn’t likely they will be able to obtain that, all they can do is harass you illegally. if it appears on your credit report, simply call them and dispute it. It cannot be reported if it is in dispute, and since they are well aware that Hollywood Video debts aren’t going to be verifiable, they will just remove it from your report. At that point they are just annoying phone calls with no consequence.

    Take it from someone who knows the FDCPA forward and back. That is how you should handle it. Dispute it with the collection company and ask for proof of the debt. Ask for all communication to be in writing as well. You are entitled to that. Then contact the credit bureaus and dispute it if it shows up. They will have to receive the proof as well.

    • bethshanin says:

      Ignore any other posts here and listen to the above. 100% accurate (I love commenters who know what they are talking about)

    • wildhalcyon says:

      This a hundred times. Even if you KNOW the debt is valid, ask for proof of ownership of the debt from the collectors. I’ve heard stories of individuals being double-collected on because the first time, they just assumed the collector actually owned the debt. As an additional cautionary measure, this helps verify that the amount is accurate.

    • 808 says:

      This link has some information on laws at the state level:

      http://www.privacyrights.org/fs/fs27plus.htm

    • Verucalise (Est.February2008) says:

      Just a warning: I’ve had the credit bureaus tell me they’ve “verified” the debt to be valid, only to find out they called the number listed on the credit report and “asked” for validation. I told the credit bureau that I asked for debt validation 3+ months prior, and although they stopped harrassing me, they didn’t take it off my report.

      I got *shrugs* from Experian saying, “I dunno. They validated it.” It was due to fall off within the next year, so I gave up.

  10. Mold says:

    Contact a litigation attorney.
    Contact the Feds and State…
    Call your legislator..if they are not a TeaBagging wingnut
    Make it clear you will go SEAL on their scammy Libertard debt fakery.
    Follow up…

  11. samonela says:

    If I still worked for Hollywood Video (if they were even still in existence!) I would totally excuse all of the OP’s “late fees” and then print proof (on the HV Dot Matrix printer) that you owed us nothing which you could in turn wave in the face of the debt collectors!

  12. Eric says:

    I had the exact same collection show up, I actually caught it because they had reported it to Experian as an open collection item. Called them they explained what it was, I offered to settle for $20 which they would take but they would leave the item on my credit file. If I paid the entirety they would remove it from my credit report.

    Instead I sent them through cerified mail a generic letter explaining I believe the debt to be invalid and had no recollection of the item and to please provide my rental history for the last two years and detailed validation of the debt (and a copy of any late notices hollywood had provided and a copy of hollywoods late policy).

    Just 2 days ago I got a letter back from the debt collection agency, they had closed my file removed the collection. It’s a pain but relatively easy.

    Good Luck

    • pot_roast says:

      The crappy thing about the FICO system is that the damage has already been done. It’s likely that your score dropped, but won’t recover anywhere near as fast.

  13. LionMan says:

    A quick mention from the Kansas Attorney General. This is coming from a collection agency called National Credit Solutions. They’re pretty much at the bottom of the barrel even for collection agencies. Apparently, from google searches, they have been making reports to credit agencies, but the agencies have been removing these reports pretty quickly on request also.

    http://cjonline.com/news/local/2011-01-25/ag-schmidt-warns-possible-new-scam

  14. deadandy says:

    I used to be a Store Manager for Hollywood. The system was ridiculous. If you had a late film, associates were supposed to call you at certain intervals and then have a letter sent. Later, the company set up robocalls to notify you and associates didn’t have to lift a finger. If you left the wrong phone number or the associate entered it incorrectly when you signed up, you were SOL.

    If it went past the letter, you got submitted to a collection agency. The good news is that you have about a 1 in 100 chance that the store a) kept good records, b) actually passed them on to corporate as the store was closing, and c) recorded your SSN to begin with. Just file an electronic dispute with the credit agencies and they will take it off your record.

    • AustinTXProgrammer says:

      Heck no. Send the collection agency a demand to do it, and use a certificate of mailing. The idiots will ignore it. Turn around and sue them, collect $1000, and go on.

      • JonBoy470 says:

        The collection agency is allowed to ignore your validation request. If they do, they’re not breaking the law unless they make further attempts to collect against you. The only contact they can make is to inform you of specific action they are taking, such as suing you, or stopping all collection efforts.

  15. SabreDC says:

    How could this be reported to the credit bureaus if it has nothing to do with credit? Hollywood Video never extended a line of revolving or installment credit to you thus they have no right to report, or give that right to someone else. Hollywood Video and this debt collection agency have no basis for saying that you are not able to repay credit. Check your credit report, annualcreditreport.com, and fight anything that appears.

    • deadandy says:

      I’m not sure you understand the concept of credit.

      When a video store lends you a film, they are extending credit, because you have not paid them the value of the unit. In other words, if the value of a DVD is $20, they are extending you $20 of credit when you walk out with the DVD. The rental fee doesn’t even apply, because it’s not a fee toward the value of the DVD–it’s just a fee for the convenience of renting it. Therefore, if you don’t return the unit (or they say you didn’t return it), you have defaulted on the credit they extended.

      • SabreDC says:

        No, that’s not reportable consumer credit. That’s simply loaning a video. Reportable consumer credit includes revolving credit, such as credit cards, or installment loans, such as mortgages, student loans, etc. I can assure you that when you fill out the Hollywood Video (or Blockbuster, Netflix, etc.) sign up forms, there is no clause saying that they are extending a line of credit to you and that their information is reportable to the credit bureaus.

        Lines of credit that are extended to consumers are done so by banks and financial institutions. When you sign up for a Best Buy credit card, the line of credit is extended to you by Chase Bank. I would bet my life savings that Hollywood Video’s video rental “credit” is not extended to you by a bank. Credit worthiness, which is evaluated based on reported consumer credit, is a measure of how able you are to repay credit. No line of credit was extended to the OP and the debt collectors have no right to report it to a credit bureau.

        I don’t think YOU understand how consumer credit works.

        • deadandy says:

          You’re right. It’s far more likely that your interpretation is correct, and it was illegal that thousands of people who we reported to collection agencies subsequently got dinged on their credit report. Er, wait.. no it’s not.

          • dvdchris says:

            Er, yes, SabreDC is correct. The fees rental stores charge are for the service of the rented item. This is more contract law than credit extension. The rental store can actually file criminal charges in some states, like Texas, for Theft of Service. Of course, this used to be more practiced when videos were $65 wholesale cost and the actual items were never returned…I filed charges several times over the years when people had multiple unreturned items. The letter usually got people to return our product.

  16. Papa Bear says:

    This probably isn’t even Hollywood Videos collectors. If the company went into bankruptcy, the trustee has an obligation to collect any debt and pay the creditors. Trustees often do not know or care if the debt is valid. If it is on the books, they apply an interest rate of 1.5% per month and go from there. If you can prove the debt in not valid, you win. If not, you pay. You need to challenge how the debt was established and calculated, but challenging a trustees right to collect isn’t going to work like it does with a collection agency.

  17. KSULax9 says:

    I am the Tim mentioned in the story.

    I have found that several people in many states have been affected by this company. I am in process of sending out a certified debt validation letter, and monitoring my credit report(s).

    The key here is that had I never read this site, I probably would have been like most and just called and tried to settle. I want to get this out to as many people as possible so they don’t end up throwing their money away for no reason.

    I had heard a local news preview talking about the letters a few days before I got one. I was in contact with my local Hollywood video up to about a week before they closed. I tried to cancel my Powerplay account, which they said had already been done, and I verified that I owed them nothing. I didn’t want charges to continue showing up on my credit card for a service I could no longer use, so I can say with certainty that these charges are untrue.

    I have also made reports with my state AG as well as the FTC. The good news is that some people are having luck getting the company to back down. Who knows how long until they sell the “debt” to another company and this process starts all over again…

  18. mamacat49 says:

    Glad I saw this. I had a run in with them 15 years ago (?) and just vowed never to go back. Time to check the credit report again (it wasn’t htere last fall….)

  19. 24NascarDude says:

    First of all, I want to thank Phil for posting a couple of very good and relevant articles lately. I have seen some improvement in them and very much appreciate it.

    Second, I’ll concur with the others here. Ask the company to verify the debt. If they keep contacting you without validating it, it’s small claims court time.

    Also, I noticed some said to use certified mail for correspondence. Is it better to use certified or registered mail (or is there any difference)?

    • Verucalise (Est.February2008) says:

      Registered mail differs from certified mail in that registered mail travels under tight security at every stage of delivery. Registered mail is also insured for up to $25,000 against damage, theft or loss. Highly valuable items and documents are often mailed using registered mail. Certified mail provides no insurance or guarantees for anything other than the date of mailing and delivery.

      Read more: Certified Mail Requirements | eHow.com http://www.ehow.com/about_5076620_certified-mail-requirements.html#ixzz1Cu3dAJWz

  20. Lukecadet says:

    This is a good article on this issue.
    http://www.msnbc.msn.com/id/41390483/ns/business-retail/

    ” they thought that since hollywood video already notified people of the overdue movies that they didn’t need to tell people and so they went ahead and put debt notices on 500,000 peoples reports.

  21. DanKelley98 says:

    I say taken ‘em to small claims court (sue to for max permitted) and make ‘em prove their right!

  22. Howard E Rosenman says:

    Certified mail is the service to use for proof it was sent and received. Registered mail is for high-value items being sent through the mail:

    http://www.usps.com/send/waystosendmail/extraservices/registeredmailservice.htm

  23. khooray says:

    Yep, they’ve been hounding me for a DVD from 11 years ago! (Some collection agency), now it’s keeping me from getting a house loan! I literally have to get these assholes to take it off my record, which they won’t, or I can’t get a loan. It’s the ONLY negative I have too.

  24. Happyclam says:

    This just shows an ignorance on how debt collection agencies work. Some work by trying to collect for a 3rd party and taking a portion of the proceeds, but the majority work by ‘buying’ the debt at a reduced price, then trying to collect on the debt afterwards, which is why they accept lower amounts and such. Best thing to do when getting contacted by anyone who claims you owe them money is talk to a lawyer.

  25. almostred1 says:

    You don’t owe the money to Hollywood Video, you owe it to the collection agency that probably bought it from HV for a penny on the dollar. Whether or not HV is still in business is irrelevant. If HV owes someone money and it is in bankruptcy, then they would be listed as an unsecured creditor and could pursue recovery according to standing bankruptcy laws.

    The attempts to invoke legal loopholes and technicalities to avoid paying a legitimate debt amuses me. I mean, you admit you owe the money, right?

    • KSULax9 says:

      I’m saddened by the fact that I took the time to read your comment, because you obviously didn’t read anyone else’s.

  26. darthphunk says:

    Last month, we were doing a check on our credit report and found that a $90 charge appeared from Hollywood Video from a store error that happened 2 years BEFORE they went out of business… and was resolved by that store within 30 days of the initial error.

    Luckily, Transunion was VERY quick to remove this charge from our report.

  27. GotTomTom says:

    This happened to me. I just sent a certified letter to NCS last week and am awaiting a response. I was never notified and only found out about it when my credit report got pulled while I was in the process of buying a house. Turns out it had been on my report since October 2010. I was furious to say the least. Cost me a house.

    Prior to Hollywood Video going out of business, I probably hadn’t rented from them in like 2 years. There isn’t one near my house so I just always went to blockbuster. After looking around online and finding several others who have gone through this, it looks like most people have successfully gotten it dropped and removed from their credit scores.

    Once I get this mess cleared up, I plan on taking them to small claims court for violation of the Fair Debt Collection Practices Act. You can sue for up to $1,000.

  28. BewareofZealots says:

    The company perpetrating this has a facebook and twitter page.

    http://www.nationalcreditsolutions.net/about-ncs/company-profile/

  29. deadbirds says:

    I worked at a Virginia Beach location and was quickly promoted because no one else would even show up. After it became very clear the company was dying I quit. Also, the two raises and large bonus I was promised by my areas head honcho ( some big shot district manager) failed to materialize after 3 months. This company was always shady and I wouldn’t be surprised to find they stole from their customers in other ways as well!

  30. Jerkamie says:

    My mother in law got a call from a collector (Tankard Group) saying she owed money to a store that went bankrupt 15 years ago winklemans in Detroit.

  31. EE2000 says:

    I had this same thing happen but it was from a company out of Massachusetts called Credit Collection Services. It showed up on my credit report, I disputed it and got a letter a few days later saying it had been removed from my credit report.
    I also filed a claim with my AG in Pennsylvania and the AG in Massachusetts. If you do a quick search you will find lots of other people having this exact same issue. Like:
    http://www.consumeraffairs.com/entertainment/hollywood_video.html