New round of collection notices for Hollywood Video prompts spike in complaints to AG

The company's been out of business for two years, but if you ever rented movies from Hollywood Video, keep an eye on your mail box and watch your credit report. A Texas collection agency is pushing the "fast forward" button to collect on old movie rental accounts, and the state Attorney General's office says you shouldn't take it lying down.

Lauren Davis of Seattle says she hasn't touched anything from Hollywood Video since the company went bust two years ago. Now, Davis and countless other consumers are being hit with collection letters from a collection agency called Universal Fidelity, LP, claiming they owe money.

"It says I owe 190 dollars," said Davis.

The letter she received claims she owes $191.26 and lists 18 movies which Davis says she rented and returned during her membership. But the notice gives no detail to support the claim that she owns money.

"I know I didn't have late fees," Davis said. "When they were closing the manager told me my account was fine."

Davis insists she's never received any correspondence about Hollywood Video rentals since the company, and it's parent company, Movie Gallery, went out of business.

Even though Hollywood Video no longer exists as we know it, trustees and attorneys are still trying to collect money owed to the company's creditors. But a multi-state court settlement with previous collection agencies prohibits collectors from making excessive, unexplained charges. According to Assistant Attorney General Mary Lobdell, the resolution last year between the Attorneys General and Hollywood Video prohibited Hollywood from reporting debts to a credit reporting agency and from collecting interest and late charges. The settlement further allowed consumers to dispute the debt and prohibited Hollywood from collecting a disputed debt unless Hollywood could establish that the charges were, in fact, due.

"If you are contacted about a movie rental debt, don't ignore it," said Lobdell. "Contest the debt by filing a complaint with the Attorney General's Office or ask that the collector provide you proof that the debt is owed."

The Washington Attorney General's office alone says it has received 40 complaints since the end of January from consumers who say they do not owe fees for movie rentals that occurred over three years ago.

The Better Business Bureau recently issued an alert about the collection practices.

Lobdell says in many cases- once people complain and challenge the debt, the collection activity stops. So again, if you're being pressured to pay a debt you don't owe, file a complaint with the Washington Attorney General and keep an eye on your credit report.

It's also important to make sure you understand your rights under the Fair Debt Collection Practices Act.

I made multiple attempts to contact Universal Fidelity about the complaints but so far- my emails and phone messages to multiple representatives have not been returned.