Debt Collectors Now Going After Former Hollywood Video Employees

Zeke once worked for now bankrupt and defunct Hollywood Video. Employees had special accounts allowing them to rent older movies (more than a few weeks old) for free and not have to pay late fees when they didn’t bring them back. Zeke is sure that he wouldn’t hallucinate free movie rentals, but the collection agency that sent him the letter insists that this policy never existed, and that it’s up to him to prove that he didn’t owe the company $28.95 in late fees at the time he quit.

Guess who’s at it again?

I just got a collections letter from [a collection agency] on behalf of Hollywood Video/Movie Gallery. Apparently I returned Hancock incredibly late, enough to have $28.95 in late fees. I’m actually not sure the store was open at that point, but I am sure that if I did rent the movie it was while I was an employee and thus free, as I went to Netflix right after quitting.

[Redacted] Collections doesn’t believe me, nor do they believe employees had free rentals. [From their FAQ for Hollywood Video customers:]

Q:”I was an employee of Hollywood Video and didn’t get charged late fees, how do I have a balance due?”

A: Hollywood Video/Movie Gallery had no such policy allowing employees to rent for free or have no late fees.

If memory serves, it was account type 3, but I could check with one of my managers on that. It was even coded to include the 2 week waiting period for movies to go free for employees.

[The agency] does say, kindly, that I can just provide a receipt showing a zero balance upon returning the movie. That might be a problem, as I know my store didn’t print receipts on return, nor am I sure of any that do.

I’m not so sure there are many people who have receipts from video stores from 2009 to begin with, but the fact the receipt they want doesn’t exist makes it a bit trickier, doesn’t it?

I’m already writing in with my dispute, but what else can I do to get rid of this and make sure nobody gets scammed into paying what they don’t owe?

We previously noted that these old Hollywood Video debts will not be reported to credit bureaus, so that’s something. Make sure that’s still the case, and then use one of these two letters to dispute the debt or make the collector prove that they really own it.

To keep others from paying bills they don’t really owe, contact as many of your former co-workers as you can, and… well, you could send them a link to this post, or just let them know the name of the collection agency and to watch out for bogus zombie late fees.

Report: Hundreds Of Thousands Told They Owe Defunct Hollywood Video
Debt Collection Company Says I Owe Hollywood Video Money
Say Goodbye To GameCrazy, Hollywood Video

Comments

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  1. Tim says:

    It’s still the agency’s burden to show that you owe the debt, they own it and it’s valid. See what they give you when you dispute it. Ultimately, they’d need to prove that Hollywood Video billed you for the amount that they say you owe. If Hollywood Video didn’t do that, it’s not a valid debt.

    Plus, how could Hollywood Video sell a debt if they’re bankrupt?

    Also, check the statute of limitations for debts in your state. If this debt’s three years old, as you imply, it might have passed the SOL, and the agency won’t be able to collect it.

    • Velkyr says:

      “How did they sell the debt if they are bankrupt”

      I would imagine the official in charge of discharging Hollywood Videos old debts is also the one responsible for bringing in money that is owed. Anything that is owed to them at the time of bankruptcy can be sent to a collections agency.

      • madanthony says:

        exactly. Uncollected debts are an asset that the liquidator is going to sell to get as much money as possible to distribute to creditors of Hollywood.

    • jrwn says:

      That’s all I came to say, burden of proof is on them.

    • Blueskylaw says:

      If you truly owe Hollywood Video money, then I’m sure that the people that Hollywood Video owes money too would like to see you pay your debt so that they could also get their money back.

    • A.Mercer says:

      Hollywood probably has records showing that the employee rented the movie and returned it late and that there is no payment for late fees. The employee is claiming that there was a policy that employees were not charged such fees however the employee so far cannot back that up with evidence. It may have been a policy that a particular manager had and was not actual corporate policy. It may have been an unofficial corporate policy and the employee would not be able to show that it existed. It could have been a real policy but without evidence showing that it was in effect during that time period it will not be of much use.

      Unless he can find evidence showing that there was a policy in place allowing these fees to be waived I think he will probably actually owe the money. Kind of rotten but I am betting there are records in place showing the guy owes the money. In effect they sort of tricked him. The saving grace might be the statute of limitations. That does not prevent the debt collectors from trying to collect, though. It just means they cannot legally pursue it legally. Of course, he can shut them down with the Fair Debt Collection Practices Act.

      • larrymac thinks testing should have occurred says:

        If it were a single manager’s policy, it would seem odd for the collection agency to have a FAQ entry addressing this exact issue. If enough ex-HV employees have quoted this policy, then the collection agency simply denying its existence doesn’t make it go away.

        The agency’s stance is just as invalid as that of the ravenous bug-blatter beast of Traal.

        • A.Mercer says:

          The thing is, unless the employee can prove that this was an official policy then the employee is tied to the balance. I gave the individual manager scenario as a possible explanation why the employee thinks there was a policy. Heck, the managers could have been confused and thought there was a policy. If no one can show that there was a policy then the customer cannot fall back on that policy as a defense against the debt. I am not saying it is right for the company to be acting like this but I do not see a viable defense against it as long as the company can show that there were unpaid late fees and the employee cannot show that there was an official policy.

          • Difdi says:

            How exactly is he tied to it? Does the debt collector have his signature on the contract regular customers sign? No? Big problem for the debt collector.

        • VeiledThreats says:

          I haven’t worked there since 1995 (my second job EVER!) but we were allowed to rent non-new releases for free and new releases for a discount, as well as our immediate family members.

      • RvLeshrac says:

        Unless there was an open account with a monetary balance, it doesn’t matter if the video was two days late or 2,000. They can’t calculate new late fees after the business has gone bankrupt.

        • A.Mercer says:

          Show me the law that says that. What can legally happen is that after bankruptcy all of the assets and data are looked over to find as much value as possible. In this case they went thru the data for returns and found that there were instances where videos were returned late and there was not a late fee. The customer agreed to pay late fees when there were late returns. The company that now owns these accounts can show that there were late videos and can show that the customer agreed to pay the late fees. The company can claim that the customer owes them money. Bankruptcy does not have anything to do with it. Bankruptcy protects the business that declares it. It does not protect the customers of that business.

          • Sudonum says:

            They have to show “Proof Of Debt”. If the employee signed a rental agreement that includes late fees then they might have a case. Regardless the onus is in the debt collector to prove the OP actually owes them the money. Just saying that “we have no record of you paying the late fee” is not proof of the debt. The debt collector must provide documentation that he agreed to pay late fees AND that the late fees were not paid.

      • Not Given says:

        They can sue for it but you have an affirmative defense.

    • Firethorn says:

      Plus, how could Hollywood Video sell a debt if they’re bankrupt?

      Business math time.

      Debt owed to a business is considered an asset on the books of that company. It might be a worthless asset, but it’s still an asset. Bad debt is treated a bit like a lemon vehicle – it’s depreciated down and sold off. When a company goes bankrupt and it’s assets are sold the debt owed it is sold along with the rest, assuming that sufficient documentation exists to make it ‘worth it’. Obviously some company things it’s worth the $30.

  2. CrazyEyed says:

    With all this mumbo jumbo about making you prove you don’t owe the debt…have them prove you do. An itemized statement from Hollywood Video showing when the charges occured and how much each late fee was should suffice. Of course they won’t be able to provide that so within acceptable state guidelines, send an additional letter advising them they are legally obligated to remove the derogitory mark on your credit (If applicable). Then keep hounding them for letters saying you do not owe the debt. That way in a couple years, once they sell the non-existent debt to another collections agency, you can make a copy of the letter and wipe your hands of it. Of course all of this is inconvenient but you do what you gotta do to protect your reputation and credit.

    • A.Mercer says:

      I believe they will easily produce records showing when the employee rented the movie and returned the movie and that there are no late fees paid. That would be good enough to show that the employee did not pay the fees and thus there is a debt.

      • CrazyEyed says:

        In conjunction though, they’d have to prove it was returned late. Simply providing dates the movie was taken out and returned would not be sufficient. Thats why I’d have the debt collections produce form of when the fees were assessed in the form of an itemized statement. That will prove the date the movie was deemed late, and any succesive and excessive dates afterward.

  3. Galium says:

    Send the collection agency a bill for $54.28 for market research providing information on former hollywood video employee rental process. If they balk tell them they have to prove they did not want this information.

  4. benminer says:

    For better or worse the FDCPA does not spell out exactly what constitutes sufficient validation and there is a misconception out there that the creditor BY LAW must send you absolute 100% concrete proof you owe the debt. (for example, some believe they must send you a copy of the original contract you agreed to). They do not. That level of proof would be for Court if it came to that.

    • JJFIII says:

      They still MUST validate the debt. If the collection agency says, yes we confirmed with the original debtor, then they can continue. For that amount of money, my exact response would be SUE ME FOR IT ASSHOLE. Make it clear that the only way they will ever see a dime is through a court order. At that point, THEY will be required to show proof that you owe it. If for some crazy reason they sue you, bring your old manager in, and tell the court the story.

      Place a dispute on the claim if it does show up on the report. If not, who cares, it’s $28.

      • deathbecomesme says:

        Placing a dispute with a credit agency hardly ever works. All they ever do is contact the company and ask them “Hey, is this debt valid?” and the company says “yes”. The company never has to PROVE its valid. They just say it is and it stays on your report.

        • RvLeshrac says:

          The company must state, under penalty of perjury, that the debt is valid. You can then sue the holy fuck out of them if they fail to provide any documentation. Won’t take much money or time if they don’t have documentation backing up their claim.

  5. Blueskylaw says:

    “the collection agency that sent him the letter insists that this policy never existed, and that it’s up to him to prove that he didn’t owe the company $28.95 in late fees at the time he quit.”

    I claim Consumerist.com owes me $28.95 for proof-reading services (actually more like $8749.37, but I’m cutting them a break) and I just sent them to collections. Is it really Consumerist’s duty to prove they don’t owe the money or is it on me to prove they do? This bullsh*t of corporations and collection company’s sending out bogus claims needs to stop. I propose a law that would state if you send out a collections claim, you would actually to provide DEFINITE proof of the debt being owed. Imagine all the excuses the collection industry would come up with when they would then start funneling a river of money to our government lawmakers.

    • Loias supports harsher punishments against corporations says:

      I concur – I think it would be great to have a law that required the notice of debt owed to be accompanied by the proof that the debt is valid.

    • Malik says:

      The problem is that these guys will have records of what movies the OP has rented, when he checked them out and when he returned them. It would not take much for them to calculate a “Late Fee Owed” from that.

    • Laura Northrup says:

      I thought you were trying to say that there was a typo in that paragraph.

  6. JGB says:

    Don’t get dragged into it. These people have no authority, as much as they would like you to believe otherwise. Just tell them “no”. ‘No’ I am not going to pay. ‘No’ I am not going to try to prove I don’t have to. Just NO.

    They aren’t going to sue you for 30 bucks

    • Lyn Torden says:

      But what if, contrary to prior reports, the collection agency places the debt on the credit report? If the affirm the tradeline during a CRA dispute, the only remaining way to get it off is a lawsuit.

  7. do-it-myself says:

    Oh Hollywood Video, how I miss thee…….

    Wait. No I don’t.

    While I did find them superior to Blockbuster in the mid 1990s, the concept of actually going into a store with a membership for the sole purpose of renting a movie then having to later return it by X date is no longer relevant, with the exception of Red Box and Blockbuster Kiosks.

    I’m so happy I never got a call back from my Blockbuster employment application.

    This debt collection crap has gone on far enough. They can arbitrarily say you owe them, fluff how much the value is and use scare/bullying tactics to force people to pay up when they may owe nothing at all. This practice should be illegal.

  8. yossi says:

    Slimeballs! A few weeks ago, an entry showed up on my credit report, saying I owed $27 from BMG music (remember those Cd’s 10 for a penny?) – the bill was from 2001 – WAY out of statute of limitations. I sent them a DV letter and the item was deleted from my report within 24 hours of receipt.

    • Mastodon says:

      Oh man, I haven’t thought about BMG/Columbia House since I was a kid. Ahh, the good ol’ days of signing up under fake names for free tapes, kind of like piracy before the internet.

      It was always funny to see collection notices addressed to Peter Weiner and the other immature names my friends and I would make up.

  9. Alliance to Restore the Republic of the United States of America says:

    “Not reported to credit agency”

    Bill —-> trash. Calls —–> ignore. Emails ——> spam folder.

  10. Bog says:

    Debt sold and bought is debt paid off. Read the FTC website. There are gems buried in there. Someone purchases a debt, they do so at their own risk. You do not have a contract with them. Basically, just tell them “thank you very much and have a nice day, now go away.” This looks like a company that purchased the debt from the video store. The purchacer of the debt paid the debt off for you.

    • A.Mercer says:

      You should probably back that up with links to the FTC website.

    • sirwired says:

      No, it doesn’t work that way at all! Where on earth did you get that idea?

      If a debt is sold, the person that sold it to is your new creditor, and you don’t have to pay the original creditor any more. That’s it. There are certainly some restrictions on what the buyer can do (the buyer is subject to collection agency rules that don’t apply to the original creditor), and they need documentation to back it up, but that’s it.

      The sale of a debt is not a “get out of debt free” card for the debtor. The purchaser can sue you to collect, garnish your wages if applicable in your state, be listed as a creditor in bankruptcy, etc.

      • RvLeshrac says:

        Indeed.

        TC is confusing the Debtor Creditor relationship with the Creditor Creditor relationship.

      • A.Mercer says:

        I completely agree with you. Think about how mortgages are sold. It happens all the time. It does not invalidate the mortgage when it is sold to a different lender. In fact, there are businesses completely dedicated to this practice. Now, the sale needs to be proper and include all of the correct paperwork and evidence. Debts are sold all the time, especially in a bankruptcy situation.

    • RvLeshrac says:

      The text you quoted means that if you sell a $500 debt for $5 to someone, you cannot then go back and demand the $500 from the debtor, nor can you demand the $495 from the new creditor.

      It doesn’t change the fact that the new creditor can legally demand the $500 from the debtor.

  11. sirwired says:

    Just let it go. It’s not worth the heartburn and hassle for $30.

    • who? says:

      My thoughts exactly. Ignore it. It’s $28. Even if they ding your credit, it isn’t going to make a difference one way or the other, and it would take a desperate collector indeed to try to go to court over a $28 video bill.

  12. Power Imbalance says:

    I like how they’re trying to shift the burden of proof. I’d tell them to sue me and if they ding my credit, I’d sue them.

  13. Admiral_John says:

    It’s the debt collectors to prove you owe the debt, not yours to prove you don’t.

    Send a letter disputing that you owe the balance and demand proof. If they can’t/won’t provide it, tell them to pound salt.

  14. Deeya says:

    This looks like a wonderful junk debt buyer to trap into making FDCPA violations to collect a few thousand dollars from and settle the case.

    Save the envelope the letter came in, send them a debt validation request and no contact letter, wait for them to violate it, counter sue them in your local small claims court, and enjoy.

  15. LionMan says:

    Looks like the collection agency is called A.R.M. Solutions, probably another bottom of the barrel collection agency.

  16. deadandy says:

    I hate to break it to you, OP, but speaking as a former Hollywood Store Director, I can assure you that the company has:
    – An Employee Rental Agreement signed by you that agrees to pay late fees (or “Additional Rental Fees” in Hollywood parlance) if you keep free rentals longer than five days.
    – Your SSN on said agreement
    – A complete log of what you rented and when, along with who checked the items out and who checked them in.
    You messed up and now they’re collecting.

    • Awesome McAwesomeness says:

      More likely, his manager didn’t charge late fees when he or she was supposed to. If it is company policy to charge late fees, then this person is on the hook for them regardless of if the manager waved them. I would make them validate the debt first, then, if it was indeed late, I would probably go ahead and pay it since this person does not have a policy in writing.

      • VeiledThreats says:

        If the manager, as an agent of the company, never collected late fees and had some additional policy about them, the OP is off the hook. If I use a coupon in a way it’s not intended at a local Pizza Hut and the manager allows it because he’s a nice guy, the corporate thugs can’t send me to collections for my ill-gotten pizza.

      • deadandy says:

        Late fees are applied automatically when an item is returned late; no action is required.

    • OutPastPluto says:

      Well then, the collection agency should be able to forward all of that to the debtor.

      The kid should tell them to cough up the documentation and tell them to pound sand otherwise.

      Tolerating abusive and fraudulent collections practices harm everyone.

      • deadandy says:

        I agree completely. I’m just disputing the premise of the OP which is that the late fees are somehow bogus and employees were not responsible for paying them.

        • DAS37 says:

          I worked at Blockbuster 20 years ago and they had a similar policy of free employee rentals. You just had to wait 30 days after the street date. However, you still had to pay late fees. Otherwise, employees could just keep videos forever. There have to be limits to these things.

    • Peggee has pearls and will clutch them when cashiers ask "YOU GOT A WIC CHECK MA'AM?" says:

      Then why is this agency denying that any free rental agreement for employees ever existed?

      • deadandy says:

        I think it’s a poorly worded FAQ. I know collection agencies are normally bastions of intelligent discourse, but I think their intended message is “Hollywood Video/Movie Gallery had no such policy allowing employees to rent for free [AND] have no late fees.”

        • Laura Northrup says:

          When I worked in a public library, employees’ cards could accrue fines, and then we would cancel them out the next time that person went to check something out. (This was library policy, not just us being obnoxious.) So we still had fines, if you went back in the records. We just never paid them.

  17. Tacojelly says:

    I would be super pissed if somebody made me retroactively pay 30 bucks for Hancock.

    That movie was abysmal. If anything, the producers of that movie owe everyone that’s seen it.

  18. Lyn Torden says:

    Debt collectors are trained to lie.

    The debt collection business has become mostly a shakedown racket. More than 50% of accounts across all collection agencies are in error or outright fraudulent. Even debt collection employees are being ripped off by the agency owners … http://www.kirotv.com/news/news/crime-law/wages-may-be-gambled-away-while-workers-not-paid/nHcrx/

  19. ashtonn4 says:

    ahhh my boyfriend just received one of these letters today! haha

  20. FrznFenix says:

    OKay, I WAS A HOLLYWOOD VIDEO & MOVIE GALLERY MANAGER…
    There was (for the 4 years i Worked @ hollywood video/movie gallery) always a free rental policy for employees. Yes we did have to pay late fees (depending on the manager and D=district manager and/or location) but all hollywood veideo and movie gallery employees were allowed 5 day rentals being allowed to rent upto 3 ovies at a time (meaning we could rent 3, watch them and come back before close same day and get 3 more, no limits)

    ALSO.. there was a “pre-street” policy that allowed all employees to rent upto 3 movie that had not been released yet. All of these policies were created and intended to increas product knowledge of current and new release movies and games so that our customers could be well informed by an employee who was well informed.

    I encourage anyone who experiencing these collections agencies calling/mailing you about this that hollywood video/movie gallery LLC were officially done with bankruptcy court mid summer last year (2011). A letter was sent out to all debtors, employees, and custoimers stating that they had only “x” amount of time to file claims and any that were not filed were not to be taken seriously or even heard after the time span expired.

    Also, while i worked for several stores as a manager for hollywood video and movie gallery in the state of tennessee and upon closing any stores (of which i closed several) we were allowed to let out customers keep thier movies as the store were closed with less than 48 hours notice.

    If anyone has any questions or needs info please contact me via this site and i will tell you what i can.

    DO NOT FALL VICTIM TO THIS CON!!
    IT SEEMS TO BE A CHEAP PLOY IN ORDER FOR SOMEONE TO MAKE MONEY FROM BEATING A DEAD HORSE! DO NOT PAY!!

  21. dvdcowboy says:

    Here I can show you how to turn that incorrect $28.95 debt into a positive $3000 in your pocket.

    1. Pull your free credit reports from the 3 main (if they reported you, go to step 2)
    2. send a letter of dispute to the debt collector via registered mail.
    3. check the tracking online, as soon as they get it, dispute the trade line items on all 3 reporting agencies.
    4. Debt collectors are terrible about responding to disputes with the 3 reporting agencies before they verify your debt. This is considered a collection action that they are not allowed to do before they verify your debt.
    5. Each Violation is worth $1k in fines. They will generally do it for all 3 at the same time, hence the $1k fine is now $1k * 3 violations = $3k
    6. File in small claims court (you will need company address and registered agent). You can find the registered agent online pretty easy by searching for “Registered agent for STATE” (replace STATE with your state).

    If you want to have real fun, wait 6 months before you file. They will usually re-sell your debt if they can not collect and you could have fun & $profit$ with the next debt collector as well.

    Disclaimer: I am not a lawyer, my advice is crazy and if your as big if a nut as I am you can find loads more info on dealing with debt collectors at debtorboards

  22. All Work and Low Pay says:

    Former Hollywood Video Assistant Manager here. I received a debt collection letter a few months back for approximately $35.00. Called up the agency and got them removed. Was pretty easy actually.

    When they asked me why I would dispute the fees, it was pretty simple. “You see how these are all in chronological order? No active employee could continue to rent if they had an active late fee on their account. The system wouldn’t allow it (without manager override.)”

    They gave me the “There was no policy for free rentals, perhaps it was just a local store policy?” line.

    I offered to fax them a copy of the page in the employee manual with it highlighted if they’d like. Also said I could provide the name and number of a former district manager to confirm the policy.

    They were VERY quick to remove the collection claim.