How A Forgotten Blockbuster Video Caused A 2 1/2 Year Battle With Discover Card And Collection Agencies

“Universal Default” is when your credit card company adjusts the terms of your loan because you “defaulted” with another company. In reader P.’s case the “default” was a Blockbuster video that his friend forgot to return. Discover Card took this opportunity to double P.’s interest rate. When he tried to fight it by closing his account, it launched him into a 2 1/2 year legal battle with Discover, a collection agency, and now the credit bureaus.

I’ve been in a dispute with Discover Card for the past couple of years involving an account I opened with them in 2001. Initially, all was well on the account, I made payments on time, kept a decent balance on it for them to earn interest from, paid them off about 2x-3x my minimum balance. Then came the day I asked a friend to return a Blockbuster Video for me, which he failed to do. I didn’t know about it until about 45 days later when I got a letter stating my account had been placed with a local collection agency. I immediately contacted the agency, explained the situation, and payed them in person at their offices within 24 hours of receiving the notice.

I checked my credit report about 45 days later to see if that collection was going to negatively affect me, and it didn’t appear on any of the big three reporting agencies, so I considered the matter over and done with. At least, until I got a letter from Discover Card stating they had reviewed my account and that they were increasing my interest rate from 11% to almost 22%(!) – despite my flawless history with them and my other three credit cards. I fought back and forth on the phone with them asking them what was going on, and eventually they revealed that it was due to a default with another agency – The aforementioned Blockbuster video that hadn’t been returned – Never mind that this had never appeared on any of the big three credit reporting agencies, and never has, so I don’t even know how they knew about it. By the time I got an answer out of them as to what was going on, I had only about a week to meet the cancel-my-account deadline they set forth, so I immediately typed up a letter demanding they cancel my account.

Considering THIS matter over and done with, I then went on about my merry way.. until I got a statement the next month showing not only the increase to my charges, but also overage charges caused by this increase in interest, and late payment fees which put me over the balance, and then, of course, overage charges. Another round of phone calls revealed that they were taking the stance that the letter had arrived 1 day after the due date and they had full rights to change the agreement since I defaulted on replying in time, and the representative refused to help me any further. Another round of phone calls the next week got me as far as getting a rep smart enough in the law to admit that the postmark is what mattered, not the date of arrival, which was a good 5 or 6 days before the due date, but of course they did not retain envelopes as evidence of when I actually sent the cancellation notice.

Ding ding, round three. I faxed the copy of the certified letter receipt and a letter explaining the legal binding of postmark over date of receipt and my situation for whom it may concern. I called a few days after this letter was delivered, confirmed that they had received it, and was assured they’d look into it.

Sometime during this whole thing I sent them a payment for $1000, as a show of good faith and that I was trying to work with them. They applied this to all the charges, which I was disputing, instead of the actual balance, and this caused a further upset and round of phone calls and letters. After this, I sent them a letter in writing stating that I would make no more payments until the matter of the interest rate and inflated charges was settled.

Eventually they finally charged the whole account off and sold the account to a series of collections agencies, each one more nasty and rude than the first. None of them understood the concept that I was perfectly willing to pay off the original remaining $1,200 balance, despite having basically been robbed for $1000 already, just none of the ever increasingly inflated charges they were demanding, despite the fact that I wrote letters of dispute to each new agency I was placed with, which seemed to happen about every 60 days or so. By this time my account had ballooned to over $3,000.

Eventually, it was placed with a law firm in my state, who demanded that I start payment on the balance they were asking ($2005, an amount which seemed to vary depending on what agency or which Discover Card rep I talked to on any given day) or they would file a lawsuit against me. Research on this particular law firm showed that they, in fact, had zero hesitation filing lawsuits, even if the charges were being disputed, or against the wrong people, etc. Other accounts I managed to dig up via Google even showed them contacting and even trying to subpeona employers, family members, you name it, and that they had a tactic of filing without serving proper notice to the defendant, obtaining a default judgment since they would fail to appear since they didn’t know about it, and dragging a simple collection into a long, involving legal matter that would cost me far more to rectify than the original balance of the debt.

Not wanting to turn what was already a dog and pony show until a full blown circus, and now 2 1/2 years into a never ending ring of disputes and challenges, I just conceded defeat and agreed to pay the balance in payments. The law firm agreed to my payment offer, and said that they were going to send me “some paperwork” to finalize everything. When the “paperwork” arrived, I found it was actually a Confession of Judgment, and there was no direct mention of the payment agreement or any stipulations that they would only file the Confession of Judgment in the event of my default, etc. This basically meant that at any time, they could choose without my knowledge or notification, to appear before a judge, show them the signed Confession of Judgment, and he could enforce whatever methods he chose to collect on the account, including repossession and docking my paycheck directly.

Naturally, I refused to sign this, and called to tell them so. I offered to have a lawyer re-draft it with stipulations that they could hold the Confession of Judgment in their care, but only file it in the event that I as 15 days or more past an agreed upon payment date, or some other kind of compromise, which they flat out refused. They basically said I sign it, or they’d get the default judgment, and that was that.

When I said I’d already retained an attorney in the matter, their tone suddenly changed, and now they wanted to talk settlement. The words “retained an attorney” apparently still do have some kind of magical intonation, even with other attorneys. They offered a settlement agreement of $1,200, which is pretty much what I owed them in the first place… well, if you exclude that $1,000 they stole to cover their bogus fees and charges, at least… so I agreed to that, and paid it within 72 hours. I waited for the letter of satisfaction from them, then another 30 days, and checked my credit report to see how it was being reported. Low and behold, all three agencies report it as having received a $1,200 payment, with an $805 balance, and it’s marked as “Charged Off/Bad Debt,” NOT as “Settlement” with a balance of zero.

I contacted the collection firm, who basically said I should contact Discover Card. Discover Card said I needed to contact the collection firm, and that they had remitted my payment, but they had never told Discover Card that a settlement agreement had been reached. I stated I had the letter of satisfaction from them, and would be happy to fax it over, and they said oh, of course, that would clear it right up. So I call a week later to confirm they received the fax, and of course no mention of it is on my account, and this has been repeated four times now.

I opened disputes with all three credit bureaus who opened investigations into the matter, and mailed them copies of the letter of satisfaction. All three updated in June with the same result:


Account charged off/Past due 180 days. $2,005 written off. $10 past due as of Jun 2008.

Obviously, $2,005 were NOT written off, a settlement was reached. And what the hell is this $10 past due as of Jun 2008?

Keep in mind I’ve already paid them $2,200 on a $1,200 balance at this point.

At this point, I don’t even care about getting my money back. I just want the bizarre balance removed and the comments to reflect that the account has been settled as agreed, with a balance due of $0. Each Discover Card representative I speak to has no prior knowledge of anything I’m talking about, and results in the same thing; fax your letter of satisfaction, and we’ll get it fixed, only to call a week later and repeat the whole process again.

I’m at the end of my patience and knowledge as to what to do here. Is there anything I can do to get my credit report updated “correctly?”

What a horror story!

In your case, we believe that it would be beneficial for you to consult a lawyer that specializes in consumer debt cases. As you pointed out, the phrase “retained an attorney” does still get the job done. Actual attorneys can be even more effective.

In the meantime, the FTC says that you can add a statement to your credit report:

If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.

Good luck.

How to Dispute Credit Report Errors [FTC]

(Photo: imjoshdotcom )


Edit Your Comment

  1. SexierThanJesus says:

    This is your own fault for having friends. Personal responsibility!! I make my own DVD’s and run my own credit card company…this guy gets no sympathy from me!!!11!1!!!

  2. mike says:

    I don’t understand why this was’t a done matter after OP paid for the movie.

    Did Blockbuster forget to record it?

  3. WhirlyBird says:

    In my experience, Blockbuster couldn’t pour piss out of a boot with directions written on the heel.

  4. rmz says:

    @SexierThanJesus: *golfclap*

  5. Bladefist says:

    This really doesn’t have anything to do with blockbuster, other then being how it all started. This is a Discover card story.

  6. Superawesomerad says:

    @SexierThanJesus: Wow, that was clever.

  7. Nighthawke says:

    Don’t do this on a week to week basis. You stay on the phone with the clown and fax off the stuff to them or PDF the whole smash and email it. Once they confirmed they have received the paperwork then move forward. You stay on them on either a daily basis or hourly if you can stand it.

  8. keith4298 says:

    First off, NEVER PAY bullies. Either pay on your own terms or take them to small claims court.

  9. spincycle0 says:

    I routinely handle consumer debt cases as an attorney. There appears to be a violation of the Fair Credit Reporting Act, which involves knowingly reporting false information to a credit reporting agency. There are statutory penalties for each violation, that you can collect personally. You are also entitled to your attorney’s fees. I’m not sure what state you are in, but you may try contacting a local consumer attorney and seeing if they will take this case on a contingency. This should be a slam dunk as far as the FCRA violations go. Even if you have to pay the filing fee out of pocket to sue these idiots (around 250 in my county) it’s well worth your time and money to clear up your credit report.

  10. yetiwisdom says:

    I’m surprised not to see more disputes with Discover on Consumerist. I was a customer of theirs for years and over a 1-day late (online) payment they assessed a slew of fees and would not relent. Also very rude and condescending on the phone.

    Nowadays, I get their mailers pretty much every week, sometimes twice a week. No thanks, Discover. Since I’ve experienced AmEx service levels I’ll never go back to Dicksover.

  11. Murph1908 says:

    Hate to say it, but this guy is going to get even more pissed when the IRS sends him a letter next year billing him ~ $500 for taxes on the $2005 that was written off. It’s like income to them.

    Then a year or so later his state treasury will send a bill too(if he pays state income tax).

  12. fostina1 says:

    the judicial system is broken.

  13. spincycle0 says:

    See 15 U.S.C. 1681s-2 (Fair Credit Reporting Act Section 632 et seq)

  14. slim150 says:

    holy shit… that is awful!

  15. chucklebuck says:

    Understand that I’m not blaming the victim here, because (s)he clearly got shafted all around. But I’m not sure I understand this:

    until I got a statement the next month showing not only the increase to my charges, but also overage charges caused by this increase in interest, and late payment fees which put me over the balance, and then, of course, overage charges.

    Near the beginning, the OP said that (s)he made all payments on time and paid two or three times the minimum payment. I can’t then figure out how late fees come into it, or how a one month increase in interest could put someone who’s paying that much more than the minimum balance over the limit.

  16. You can argue that your rights were violated under the FCRA. Businesses have to disclose why they made adverse decisions relating to your account and from which bureau they got this information.

    What troubles me about this story is that it appears that the Blockbuster collections could not possibly have reported to his credit report before he paid the past due amount according to his timeline. At the same time the only reason Discover would do this is if they received info from his report that showed derogatory activity.

    Either way it sounds like he may have a dispute under the FCRA.

  17. Pro-Pain says:

    This whole credit reporting thing is a scam. I no longer let this bs hold me hostage. Screw ’em all. The best way to handle the credit info Gods is to dispute EVERYTHING ligit or not on your report twice a year. It’s a great idea. I’ve gotten actually money I owed taken off my credit report because the people didn’t respond back in time. Keep disputing. It’s free!

  18. Pro-Pain says:

    Oh and, Discover card SUCKS. AmEx FTW!

  19. BigPapaCherry says:

    Every blockbuster I’ve ever forgotten to get a movie back to has called with a “The movie you rented is late” message.

    Seems irrelevant, but could have saved all this Discover Card hassle.

    Also, why would you pay $1000 (a full 5/6th of his balance, if it was $1200 as stated) as a sign of good faith? I don’t think I’d pay anything more than half of the balance for a sign of good faith.

    Good luck OP, sounds like you’ll need it

  20. bleh says:


    Please, tell me more.

  21. baristabrawl says:

    “I have retained the services of an attorney,” is BS. If you actually had, then the attorney would be sending the letter, not you.

    I’ve worked in Patient Accounts in hospitals for years and people say this all the time for a $45 balance. Um, paying the balance is cheaper and easier than getting an attorney. If you could afford an attorney, then you could afford to pay your balance.

    My point: Actually get an attorney. It might have saved you the money.

  22. tortcat says:

    Don’t ever just “give in” and agree to pay somethign that you do not owe.

    Go on the offensive and file suit in small claims court. As was mentioned above..spend the relatively small amount you would need to do so and to consult a attorney that specializes in these cases.

    You will most probably find the day or some before you go into small claims an offer to settle and clear your record, but you sound like you could easily win a judgement against Discover

  23. mbd says:

    Discover Card was originally created and owned by Sears, though a small bank that they owned. Anyone know if they still own Discover Card?

  24. chrisjames says:

    Two points of advice:

    – Always stipulate that a payment is to be applied to the balance or principle (or the fees if that’s what you want). If there are multiple interest rates, then instruct payment to be made to the principle with the highest interest. It doesn’t always work, but if you don’t attempt it, the lender or collections will attempt to apply it to whatever benefits them the most, which will almost always hurt you the most. It’s not sleazy, it’s just business.

    – Never, never, never give or accept any amount of money from an entity that you are currently in dispute with. Wait until everyone has come to an agreement on what is to be paid, get it all in writing, then get a payment plan in writing, then let money exchange hands. Good faith payments don’t have a place in business (and you are doing business with these punks). If you really want to make a show of good faith, then write and sign a document saying that no matter what the settlement, you will pay at least X amount once a settlement is reached.

  25. hypoxia says:

    I strongly recommend finding a consumer debt attorney and suing the hell out of the collection agency. I think you have a good shot at a much more pleasant resolution and you’d be surprised at how much more cooperative collections agencies suddenly become when you sue them.

    I’ve got a lawsuit in federal court right now against one. *heh*

  26. anarcurt says:

    Formal written complaint with the OCC about a national bank or its operating subsidiary

    Customer Assistance Group
    1301 McKinney Street
    Suite 3450
    Houston, TX 77010

  27. BigPapaCherry says:

    @mbd: According to wikipedia:

    “Discover Card is a major credit card, issued primarily in the United States. It was originally introduced by Sears in 1985, and was part of Dean Witter, and then Morgan Stanley, until 2007, when Discover Financial Services became an independent company.”

    Sounds like they no longer belong to Sears, but they must be staying close to their roots.

  28. Concerned_Citizen says:

    At the very least you should take discover to small claims court to get the 1,000 dollars of bogus fees back. I’d imagine such a judgement outlining that the fees were bogus could help you fix your credit report.

    @chrisjames: Very good point. Usually businesses treat a partial payment as an admission of guilt, not a good faith gesture. But next time clearly it is just easier to pay it off in full and file a civil suit to get the overcharges back. That way you are only ever dealing with one company.

  29. JustaConsumer says:

    The lesson here is: Don’t go to Blockbuster! Their business model was to make 50% of their income from late fees.

  30. all4jcvette says:

    I’d start with writing a letter to the FTC, SEC, your states AG’s office, and if the collection agency is in another state, that AG’s office, as well as the AG’s office in the state that Discover has there corporate HQ. I had a similar problem where the Equiafax wouldn’t remove a bogus account. Once they started getting calles from these government offices, it was quickly removed.

  31. shadowboxer524 says:

    Blockbuster is to blame for the whole thing even starting. It is inexcusable that you only found out about the movie 45 days after its due date. I work at a Blockbuster, and we call everyone who has movies that are 6, 10, 12, and 14 days late. Letters are also sent (not just after we’ve sent you to collections). While I work at a franchise store, other stores should have similar policies. I can’t believe that you weren’t informed before being sent to a collection agency!

  32. Farquar says:

    It is amazing how a letter on legal letterhead can resolve things. I’ve recieved a prompt “we are ceasing all collections efforts on this account” letter each time I’ve send a letter on behalf of a consumer.

  33. forgottenpassword says:

    If this had happened to me…. I would have cut my friend’s balls off for this whole mess! (for forgetting to return the video).

    Dealing with blockbuster (especially the tards that operate the registers/stock the movies) is miserable. Back in the day I would routinely get charged with late fees for movies I definately turned in on time. One guy forgot to remove the yellow security thing that prevents the dvd case from opening (I suspect he did it on purpose because I had the *audacity* to help him spell out the movie “frauds” because he didnt know how to spell it when I had him look it up on the computer). It turned out to my advantage…I figured out how to open it with magnets myself , watched the film , put the strip back in & claimed I couldnt watch it & got a free credit for another film (I figure that was the least owed to me for the momo leaving in the security strip in the first place).

    I also had one momo forget to check in a film I returned & I just about shit myself thinking I was going to have to pay 80 bucks for a film I actually returned. Luckily they did a search & found it, but I was calling every day for an update so they knew I wasnt going to just forget about it.

    Nowadays….its just easier to download a film on the internet. I only go to blockbuster when I get a free coupon or something.

  34. Anonymous says:

    Blockbuster sending me to collection agencies over $6 late fee’s is the sole reason i switched to Netflix.

    Blockbuster needs to treat their customers better.

  35. chrisjames says:

    @Concerned_Citizen: As my father taught me, “it’s better to owe money than to be owed money.*” Always negotiate first, and if time is short, then negotiate via lawyer. It’s better to pay up a few hundred dollars to straighten things out than to pay out a few thousand and possibly get back nothing. Though, it all depends on how well you trust the other party, your lawyer, and the legal system. When it comes to money, my lifeblood, I trust only myself.

    Maybe a third point of advice: if you think paying more than the price of a lawyer in unqualified fees and debts is unjust, then it’s financially beneficial to hire the lawyer anyway. That’s simple Vegas odds at work.

    * Specifically regarding a dispute. Otherwise it sounds like a guide for carefree spending on credit, heh.

    @shadowboxer524: The amount owed to Blockbuster was paid and resolved. Though it was the catalyst, Discover decided to profit on that completely unrelated incident, and universal default was the tool.

  36. y2julio says:

    @baristabrawl: My union offers legal services to union members. So yes, It’s possible to get an attorney without paying for one.

  37. wiggatron says:

    @SexierThanJesus: It’s pretty obvious why you don’t have any friends. Sucks to be you.

  38. dotcomrade says:

    There are a few steps YOU can take to prevent this from ever happening to you:


    Freezing your credit reports will prevent a collection agency from accessing your credit file. This example proves just how easy it is for a collection agency to access your report over ANY unpaid debt and that includes magazine subscriptions, overdue DVDs from Blockbuster, etc. In theory, if they cannot access your credit file, they cannot report negative activity.

    Next, if you get a “universal default” notice, don’t freak, just pay the minimum payment immediately and work out the details later. If you close an account with a long credit history it will reduce your FICO score. It’s better to pay it down and leave it open and unused until you clear things up. In the meantime, work on removing the negative report that led to the “universal default” penalty. When that happens, you can request that they reduce the interest rate and most will do that immediately and some card companies will even do it retroactively. Instead of getting pissed off by sending them a letter refusing to accept the new terms and closing your account, just pay off the balance as fast as you can–use a balance transfer if you must.

    Never rely on one form of communication so you won’t end up like the OP arguing over a postmark –which means absolutely nothing to a CSR looking into a computer screen. Contact your card company by as many means as is possible:

    Use the online banking page to send them a “secure communication” regarding your account. (The confirmation of that communication is your postmark!)

    Also send them a certified letter. And it can’t hurt to search Consumerist for the EECB contact info and email your concerns to their executive customer service.

    Never pay a collection agency. Always negotiate with the bank or company directly and pay them. A bank or company cannot always honor an agreement that is made with a separate entity. And Collection agencies are sleazy enough that they might say anything to get you to pay.

    And finally, to teach Blockbuster a lesson for sending this to a collection agency instead of contacting you directly, switch to Netflix and consider suing Blockbuster in small claims court for the expenses related to that defamatory report on your credit file.

    All this over a friggin DVD!!! Freeze your credit reports. End of story.

  39. retailnomore says:

    This weekend I will definitely be closing my Blockbuster and Movie Gallery accounts!

  40. dotcomrade says:

    After reading this, I decided that I am going to visit my local Blockbuster and cancel my membership. I will never use them again. I just signed up for Netflix (with instant viewing) and will use the McDonald’s owned REDBOX vending machines for new releases. With REDBOX, they don’t come after you with a collection agency-they just debit your credit card for a maximum of $25.

  41. Anomaly69 says:

    I wonder when this kind of thing will cause a victim to go postal and start killing people over it? But I doubt even that would change it.

  42. Ein2015 says:


  43. engfish says:

    I was a charter user of Sears/Discover way-back-when, attracted by the whole “1% cashback” deal and all. Very handy buying gas at $.60 back then.

    Stopped in the late 90s, by paying online, credit to the account took two weeks (and “no way” to prove Discover was in error except by sending them the whole month’s bank statement with the debit notated–not their business!) and, by then, the fees went all over the place. Three months of that and I discovered it pays to not use Discover.

    And CSRs acted so surprised that this decades-old cuss-tomer left the near-usury 26.99% APR! Who wouldn’t want to be “dis”sed like that?

  44. Difdi says:


    I can’t then figure out how late fees come into it, or how a one month increase in interest could put someone who’s paying that much more than the minimum balance over the limit

    The OP opted out of the interest increase by sending them snail mail to close the account within the time limit to do so. Discover refused to accept the opt-out, and applied the increased interest. They quite likely raised his minimum payment at the same time, though he doesn’t say so.

    He paid them what he legally owed them, which was less than the new adjusted minimum payment, thus incurring penalties. Discover then refused to remove the penalties they had no right to apply, and kept adding them as the dispute continued.

    When he paid them a large portion ($1000) of what he actually owed them ($1200), they applied it to the penalties (which they had illegally applied) first, which ate up the entire payment, leaving the balance he did owe untouched.

    I’m not a lawyer, but it’s obvious even to me that Discover has never even heard of the FCRA…

  45. azntg says:

    @all4jcvette: I second that suggestion. This is clearly one of those cases that officials and regulatory agencies should take a look at.

    From what I can tell, federal (and probably state) laws were broken and agreements were not honored.

    Even though the bulk of the case has flown by, mostly against P’s favor, he still has a good shot if he decides to turn back and go after these guys. I hope P acts soon though!

    @dotcomrade: Absolutely not! I’m sorry to say that is an incorrect assumption that many people have about freezing reports.

    Freezing your report is effective to prevent new creditors that you have no prior business with to pull your report. Hence, it’s effective at stopping fraud, especially if a criminal tries to apply for credit under your name with a creditor that you’ve never had any business with.

    However, existing creditors and collection agencies doing business on behalf of one of your creditors can still pull your report as part of permissible purpose.

    So, freezing the report will not achieve the intended purpose.

  46. thalia says:

    Blockbuster had been sending me a collection notice every few months and filling up my voicemail for two years, and I’ve never even had a Blockbuster account. And the two movies they keep egging me about are two movies I have never even seen before. Of course, I used the Sample Letter for Disputing a Debt Collection Notice from Consumerist and it cleared the problem right up :)

  47. PhiTauBill says:

    As an attorney (albeit one practicing not remotely close to the consumer debt area of the law), I find that I get great results by: 1) knowing my rights, and contacting executive customer service, the CEO and/or the general counsel’s office with any grievances that I may have; 2) knowing appropriate incentives to “offer” to the company in question to get them to understand the downsides of continuing their egregious conduct (FCRA litigation, regulator and BBB complaints, bad publicity on blogs and sites like Consumerist); and (3) having the magic ESQ. title to add after my name. Most everyone can accomplish 1) and 2) no problem, and that is 99% of the battle.

    A tip for complaints against public companies: Scan SEC filings for CEO and general counsel contact information if you have trouble locating said information in cyberspace. At the very least, you can always start with the investor relations contacts, as they are generally plugged into the Boards of Directors that the CEO and General Counsel answer to.

  48. rmz says:

    Quick, somebody help find wiggatron‘s sense of humor.

  49. pHluid says:

    I’m the OP – First off, a little clarification.

    Difdi’s account of how my account ballooned out of control so quickly is exactly right. They raised the minimum, raised the interest, I paid what I thought I owed, the penalties inflated, and pushed me over my balance.

    Also, I WAS carrying a balance not dramatically short of my limit; I was making 2-3x the minimum payments due, not 2-3x the balance (as I mistakenly typed) … This particular card had a credit limit of $1,500, I had approximately $1,200 on it when everything spiraled out of control.

    And finally, on the clarification, I did and do in fact have an attorney – a personal friend – “retained.” He has not been handling this for me thus far because I thought I could get the situation under control without calling in a favor, which I’m loathe to do, and can’t really afford to retain an attorney I’m not personally associated with. If it continues, I’ll be forced to ask him to step in, but thus far I’ve just been keeping him up to date about it, though I haven’t talked to him since the settlement regarding the incorrect reporting of my account. It’s starting to look like it might be time to give him another call, however.

    Oh and one more thing – I don’t blame Blockbuster for any of this, this is in fact a Discover Card issue, as far as I’m concerned. IIRC, I had moved sometime around that period, and Blockbuster didn’t have current information until the collection agent found me. Stuff happens; it’s whats been happening ever since that is the real nightmare, and this is solely on Discover Card and the collection agencies heads.

    Anyways, updates:
    After four seperate Discover Card representatives assured me that a faxed copy of the letter of satisfaction from the attorney would settle things, the fifth one I spoke to this morning says that their policy is not to regard letters of satisfaction as evidence, “because I could just forge them.” When pressed as to why they would not contact the attorney’s office and ask them themselves, since it’s got clear letterhead and a signature of the representative that authorized the settlement, they said they could not contact the attorney directly since the attorney was hired by a third party agency, not Discover, a kind of catch-all collections agency that retains attorneys local to the debtor. I called the attorney’s office and they (reluctantly) confirmed this, and the fact the payments are remitted to THIS agency, not Discover directly.

    I’ll update back once I get ahold of the agency in question, since they seem to be the only people who might be able to resolve this for me, short of a FCRA lawsuit.

  50. Burgandy says:

    @Pro-Pain: Will they let you dispute the same thing more than once?

  51. katylostherart says:

    this guy was really really bad at keeping track of this whole thing. future reference, get a signed notice of an agreed settlement amount BEFORE sending them money. then after paying with something trackable that being said, get a lawyer.

  52. Dyscord says:

    Heh. This reminds me of a call I got from a collection agency once. They said I owed 2000 dollars on an old card, even though I had canceled it two years ago. The lady I talked to was REALLY rude and DEMANDED that I pay the money, even though at the time I was in a ROUGH time in my life and didn’t have the money. I was told “Well you better find a friend who has 2000 dollars to loan.”

    Obviously I never paid it and never heard from them again.

  53. pHluid says:

    @@katylostherart: I’m not sure what you think a signed notice of settlement would do for me in this situation. I have the letter of satisfaction, which trumps all – An agreement was decided upon, and I fulfilled my end of the bargain, end of story, I have the proof of which, and the law firm that collected the debt agrees with me.

    Should I have retained a lawyer from day one? Probably. Should I have conceded defeat and given in to their bogus charges and agreed to a settlement? Probably not. But you have to understand that towards the end, threats were being made of a lawsuit, in which I would be unable to adequately defend myself on such short notice, and a settlement was the only fast and sure defense against having a default judgement against me, which is far worse than simply having a settled account, in terms of your credit report. Should things have been handled differently overall? Definitely. But hindsight is 20/20, as they say, and this is my first (and thus far, only) experience with this kind of matter. I could not afford an attorney for most of this, and I didn’t befriend one well enough to ask for charity until the settlement agreement had been reached, at which time I assumed things were pretty much settled.

    I’m not even disputing the bogus charges anymore. I don’t care about the money lost or the negative on my credit score. I just want them to report it as settled. As far as anyone pulling my credit report right now is concerned, the account has $2005 charged off and $10 180 past due, which isn’t even a remotely close to accurate statement. A settlement was reached. They have the right to disclose the amount written off, but they do NOT have the right to mark it as a Charge Off or Bad Debt or misrepresent the amount owed, which is exactly what they’re doing, despite a finalized settlement agreement which all parties involved agree with, except Discover Card. They have hired another entity to act on their behalf, and are not honoring that agreement.

    A signed agreement of the terms of the settlement does not matter. I have a letter in my possession stating that the account has been satisfied and that I owe nothing. THIS IS NOT BEING HONORED. Your suggestion is irrelevant, at this point.

  54. dotcomrade says:


    …existing creditors and collection agencies doing business on behalf of one of your creditors can still pull your report as part of permissible purpose. So, freezing the report will not achieve the intended purpose.

    Azntg, since when is Blockbuster one of “my creditors” ?

    As far as I know, at no point did I provide Blockbuster with consent to pull my credit report when I signed up for their in-store membership.

    Let’s say I froze my credit reports and I carry only three credit cards, a MasterCard, Visa and Amex. In addition, I’ve opted out at* That means the only activity in my file would be inquiries and account activity from the three existing creditors with whom I have an established relationship.

    You are correct in that if I pay any of my three existing cards late, they can update my account status immediately as they already have access to my frozen report. And if I default on one of my existing cards, the bank–or collection agency acting on behalf of the bank–can also pull a report, even though my file is frozen.

    Now here is where you are wrong: Blockbuster-or an agency on their behalf–cannot come along (after a file is frozen) and say, ‘hey, let us in, we’re one of his creditors too.’

    The whole point of freezing your credit reports is to stop any new activity–with just one exception: negative reports stemming from public records. So if you are sued in civil court and a judgment is awarded, that will appear on your credit file regardless of whether it is frozen or thawed.

    *Before freezing your reports, it is important to also opt out of pre-approved offers at In this example, Blockbuster (or any other creditor) could gain access to your report under the guise that they want to offer you a pre-approved credit card. With that inquiry, they’ve established themselves as having an existing relationship, which may lead to future access.

  55. TechnoDestructo says:

    You know, if the homes, offices, and vehicles of these dicks started catching fire, they’d never figure out who did it. There would just be too many suspects.

  56. flipx says:

    What a cash cow Ball Buster Video and all its little cronies.Feel sorry for ya man.

  57. newfenoix says:

    Block Buster was PUT out of business by the city that I used to live in because of fraud. Criminal charges were pressed against the store by the city. If you rented a movie, walked out the door, walked back in and returned it they would charge you a late fee. I will never go to Block Buster.

  58. Breach says:

    Messy, very messy. My fiance went through this same kind of thing too with collection agencies, even the lawyer she hired was a real piece of work too! Makes you feel pretty helpless out there on the battlefield, sometimes you wonder if everyone really is out to screw you.

  59. dotcomrade says:

    @azntg: You might be right, after all, and in that case, I stand corrected and dejected. For if these exclusions from Equifax’s website are true, it means there is really no concrete way to protect your credit:


    When your Equifax credit report is locked, Equifax does not allow third parties such as credit grantors access to your credit report. However, access continues to be allowed for certain requestors including:

    Companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file;

    Federal, state, and local government agencies;

    Companies reviewing your application for employment;

    Companies that have a current account or relationship with
    you, and collection agencies acting on behalf of those whom you owe;

    For fraud detection and prevention purposes;

    In connection with your application for insurance;

    Companies that wish to make pre-approved offers of credit or insurance to you.

    And here I thought prior relationship meant one who had previously accessed my credit report. The obvious concern here is that even if you freeze your reports, an ID Thief can open up a Blockbuster account, rent an apartment or default on any type of obligation under your name and their default will end up on your report anyway. So all you’re really doing by placing a freeze is stopping credit card and loan thefts in their tracks.

    Oh well, now I have to reactivate my subscription to a credit report monitoring service which incidentally, was terminated when they could no longer access my report after it was frozen. I guess they lost a lot of subscribers to the credit freeze and quickly fixed that problem!

  60. SayAhh says:

    Have your friend pay up; this is all your friend’s fault :)

    I don’t know sucks more: Blockbuster or Discover! One more reason to go with Netflix and American Express (or cash!).

    Credit bureaus are partially at fault, too, since they are really for-profit corporations offering a “service” that they’re supposed to make sure is accurate, but it’s your job to pay them to see that they’ve gotten everything right so that you don’t get screwed when taking out a loan or accruing interest on your credit cards.

    If all else fails, look in the mirror and take responsibility for signing up with such a crappy company! I hope that movie was worth it!

    Interestingly enough, I got my last traffic ticket (waived in court when officer did not appear) while trying to access the shopping center parking lot where the Blockbuster store was located. Haven’t gone there ever since.

  61. vancedecker says:

    Forget about Discover Card!

    File a claim in small claims court against the Credit Bureau, please everyone shut up and read further, of course they will claim that they aren’t to blame, it doesn’t matter, charge them with “Defamation of Character”, if you have money, hire an attorney, if not use legalzoom or one of their competitors who will be able to file everything you need electronically.

    Worked for me.

  62. floofy3223 says:

    Hire an attorney immediately, and sue everyone–Blockbuster, Discover, the collection agency AND the credit bureaus. Sounds like everyone in this story is in violation of the FDCA! Here’s a website to help find an attorney in this area of practice


  63. floofy3223 says:

    oops, I meant FCRA

  64. claming says:

    This really doesn’t have anything to do with Blockbuster. He didn’t return the dvd, that isn’t in dispute.
    Discover is the one screwing him.
    He didn’t return the dvd. So Blockbuster had every right to do this. Discover didn’t have any right to tack on an extra 10% because he didn’t return a dvd.
    I know tons of people hate Blockbuster here, but they didn’t do anything wrong.

  65. vancedecker says:

    @claming: …yeah, exactly, what does blockbuster have to do with anything here???

  66. mac-phisto says:

    this sounds eerily familiar to what i went thru with discover.

    essentially, asking them to close your account (when you still have a balance) triggers a buttload of fees & almost instantaneous sell-off to one or more collection agencies.

    when i closed my account, i had a $1000 balance. when i tried to pay on the closed account, they rejected my payments, refused to send bills & claimed the account didn’t exist.

    when i finally tracked the account down, it had ballooned to $2800. i wasn’t as savvy as i am now or i wouldn’t have let that happen, but it is what it is.

    fixing entries with the CRBs (esp. in a case like this) is a nightmare – good luck to the OP. my advice – watch out for the “soft delete”. frequently a mistake will disappear in the short term only to reappear 3 mos. later & the process starts anew. fun stuff.

  67. GyroMight says:

    What ever happened to the movie? Did you give your friend a good ‘ol fashion butt whooping?

  68. Yeah, just a tip: When I got divorced, of course, LOTS of debt. One credit card that had a limit of $2500 was well over $4500 after two years of not paying on it. (I was poor, no heckling) I contacted them after I got a good tax refund… I offered a settlement of $2300 over the phone, which of course, they accepted. I faxed them MY terms of paying, and the manager had to sign and date the document, then send it back before I would pay. They actually retyped everything that I asked for, officially signed and sent it back with this term:
    That after paying the settlement amount, they are to mark my credit report “Paid in FULL” no, not “Settled in Full” or anything else… it HAS to say “paid in FULL”. Of course, they frigged up reporting it to the credit bureaus and with one copy of that letter, not only did the credit bureau see I WAS RIGHT, but they COMPLETELY REMOVED IT from my credit report. How cool is THAT.

  69. RChris173 says:

    too long to read…I’m suffering from CLH.

  70. Overheal says:

    Ive never heard one good reason to get myself involved with credit but ive heard this and a million other reasons to avoid it like the plague. And so I have. Im 20 and somehow ive managed to insure there isnt a single credit card company out there that knows my whereabouts and if they come and find me I’ll sooner send them back to hell.

    I hope this works out for you OP.

  71. katylostherart says:

    @pHluid: what i understood from the story was that there wasn’t any proof, just conversations. my apologies if i misread it.

    “I found it was actually a Confession of Judgment, and there was no direct mention of the payment agreement or any stipulations that they would only file the Confession of Judgment in the event of my default, etc.”

    that coupled with “waited for a letter of satisfaction” lead me to believe that you paid something before they sent an agreement saying “you pay this, we say it’s done” and THEN get proof you paid it.

    like a signed invoice and then the canceled check in response to the invoice. does that make sense?

  72. pantherx says:

    Never ever ever ever ever ever pay a collection agency.

    Even though the original company will lie and say they cannot accept payment once submitted to a collection agency, they can, will and at least in my state are legally bound to do so.

    Also, never ever ever ever ever pay anyone when there are charges in dispute. You are legally binding yourself to the charges at that point.

  73. Fist-o™ says:

    If I’m moving away from town, do I need to call Blockbuster to “Close my account”? Haven’t rented movies there in months….

  74. pHluid says:

    @katylostherart: You’re kind of misunderstanding, yeah. We worked out a payment agreement, finalized all the details, they said they were sending paperwork that would have everything in writing, but it didn’t. It was a “Yes, you own my soul and feel free to dock my paycheck and put a lien against my house” Confession of Judgement.

    In regards to the settlement, I do have a (faxed) agreement from them saying you pay XXX amount, we’ll close the account. I have the checks that show I paid that amount, and I have the Letter of Satisfaction from them saying that I fulfilled my end of the agreement and everything is done. I left out some details; the story was long as it was. :)

    Anyway… UPDATES! The attorney firm was retained by TRAKAmerica, a sort of clearinghouse “legal network” that hires firms local to the debtor so they can intimidate them with litigation. Check out their website here, just the wording of it angers me: []

    “As a legal network, we can use legal talk off language in these conversations, which often means debtors agree to a payment plan rather than face the legal process.” and “We are no longer requesting money from debtors-we are actively taking it.”

    Good lord. Thanks for putting my fate in the hands of the vulturous bastards, Discover!

    I’ve tried twice to contact them by phone. The first time I got a “We’re closed blah blah blah” and it dumped me a voicemail that was completely full and would not let me leave a message. The second call I got in, but it wanted a party extension. When I pressed 0 for an operator, I again got dumped to a voicemail that was full and could not leave a message. Since then I have tried to call them 4 times from the same phone number after that, and each time I get an “All circuits are busy.” message and it hangs up on me. If I call from a DIFFERENT phone number, it goes through, but I get dumped to the same full mailbox. So apparently they blacklist your number after the first call. Nice, eh?

    I’m making one last round of letters out to Discover, the attorney firm, TRAKAmerica, and the big three CRA’s. If I don’t see action in 45 days I’m asking the lawyer to take over and handle the matter from here, because this could not be a clearer violation of federal law.

  75. @Pro-Pain: Dude, Fuck Amex.

    I forgot about a $40 charge I made on my seldom-used Macys card for a couple of months. By the time I realized my mistake, I owed almost $80. I paid Macys immediately. About the same time, I logged in to check on my Amex accounts and found out that they’d closed them BOTH (one over 4 years old, the other 2), without so much as a courtesy phone call informing me of this. (Good thing I wasn’t traveling abroad and counting on them to work when they made this decision!)

    About two months later I got the letter from them informing me that because of “negative information in my credit file” they were closing my accounts. The stupid little Macys delinquency was the only negative information on my credit report. I suppose if I’d had a balance on my Amex they would have jacked up my interest rate to 150% or whatever, but I guess they figured the only way they could stick it to me with a zero balance was to close ’em.

    WTF, it was Macys that I arguably “harmed,” (even though 200% ROI they got over 3 months is a pretty good investment) so how fucked up is it that they didn’t even threaten to close my account, but Amex, who has always gotten paid on time, was so spooked they had to dump me immediately?

    I will never carry an Amex card again.