When the parent company of Hollywood Video filed for bankruptcy protection earlier this year, its customers lost more than a source of the latest games and DVDs. Some of them feel like they are now being held up by a collection agency working for the now defunct company.
In the last 60 days ConsumerAffairs.com has received 65 complaints about Hollywood Video or its collection agency, Consumer Collection Services (CCS). The stories are remarkably similar.
In most cases, the consumer is contacted by CCS with a claim that the consumer owes a specific amount - almost always $90 or more - due to either unpaid late fees for games and DVDs that were never returned. There is no paperwork offered and the consumers say they were completely unaware of any debt. Several consumers said the collection agency was very willing to settle for substantially less than the money allegedly owed.
Christina of Chandler, Ariz., says she is sure she has never been late on a return.
"I remember that the day we turned in our videos the store was closed and we thought it was strange because it was in the middle of the day, but we put our videos through the slot anyways so we wouldn' be counted late," she told ConsumerAffairs.com. "Well, come to find out that the store never reopened again. I called CCS to dispute the amount and she said that we had two videos from January 2009 that Hollywood Video claims were missing, so they are charging full price for each video and late fees."
What's that smell?
Christina says she thinks the whole thing reeks of a scam, and Yuvonne of Seattle, Wash., agrees.
"I was just issued a threat from CCS that if I do not pay $91 for some unknown Hollywood video they say was returned late, they will damage my perfect credit score," she said. "I never even received a notice of a late fee. How can this be legal? You can just say that someone owes money with no evidence and send it to collections before even contacting the person? Why doesn't every business start making false claims to Credit Collection Services? Where is the consumer protection? How can this be anything but a scam?"
The case of Pricilla, of Pharr, Tex., gets even odder. She received a notice from CCS in the amount of $395.33 for late fees and rentals. But she paid extra so that she would never have to pay late fees.
"I did have an account with Hollywood video and was enrolled in a program in which my bank account would be debited once a month in order to have unlimited movie and game rental and that I would not have late fees," she said. "My account was in good standing and I have been incorrectly billed."
Know your rights
Melanie, a consumer in Brooklyn, N.Y., had the same experience but found a way to fight back. When she received the written notice from CCS, she read the fine print, learning she had 30 days to contact them in writing to dispute the claim.
She also went to the Federal Trade Commission website where she said she learned how to respond.
"Send them (the collection agency) a letter asking for details about the alleged debt - things like store location, dates, times, titles of DVD's allegedly turned in late or not returned," she said. "It is their job to prove you owe them money, not the other way around. Also, refer to the Fair Debt collection Practices Act and say that you would not like to be contacted again except with the information you requested and only by mail to an address you can specify. If they cannot produce sufficient proof you owe money with written records then you do not have to pay them and they cannot report you to a credit company. There are laws to protect you against these things. Please take the time to look at the above site. Make sure you send the letter via certified mail and get a receipt proving the agency received your letter."
Meanwhile, the Hollywood Video store brand is up for sale, raising the possibility that another company will resurrect the name and begin contacting old customers again. The parent company, Movie Gallery, received approval last month from a federal bankruptcy judge in Richmond, Va., to auction its brand names, Internet domain names and customer databases.The auction is set for next week.