For Immediate Release
Media Contact: Bob Cooper
Date: May 6, 2011
Settlement Provides Credit Report Relief to Hollywood Video Customers
(Boise) - A nationwide settlement involving Hollywood Video will benefit thousands of Idaho consumers who have outstanding rental accounts with the bankrupt business, Attorney General Lawrence Wasden said today. Wasden’s office received more than 30 complaints alleging that collection agencies were attempting to collect excessive fees from former Hollywood Video customers and reporting negative account information on customers’ credit reports.
“Consumers have rights under debt collection laws, including the right to dispute a debt,” Attorney General Wasden said. “In many instances, Idaho consumers reported not owing the debt that the collection agencies were trying to collect.”
The problems started after Hollywood Video and Movie Gallery filed for Chapter 11 bankruptcy in 2010. Hollywood’s approved plan created a liquidating trust to collect an estimated $244 million in outstanding debts reportedly owed by 3.3 million customers. The trust contracted with Credit Control Services, Inc., in Massachusetts, which subcontracted its collection responsibilities to National Credit Solutions of Oklahoma.
“Without first notifying consumers about their delinquent accounts, the collection agencies reported consumers’ accounts to credit reporting agencies,” Wasden said. “Because of the collection agencies’ practices, consumers had difficulties obtaining new credit and received lower credit scores. This settlement will help repair consumers’ damaged credit reports.”
The settlement agreement, filed in the U.S. Bankruptcy Court for the Eastern District of Virginia, requires the liquidating trustee to rescind all previously filed negative credit reports and prohibits the trustee from reporting consumers’ debts to credit reporting agencies. The trustee also agreed that:
The Attorney General publishes a consumer education manual about credit and debt issues. The manual is available here or by calling the office at 208-334-2424. Consumers who incur a loss because of unlawful debt collection practices can file a complaint against the debt collector with the Attorney General’s Consumer Protection Division. Click here for more information on how to file a complaint.
- End -