Hollywood Video Collectors Violate Law Over Movie Late Fees

If You’re Late Paying for the Picture, No Home Movie for You

In 1957 legendary film producer Robert Evans was picked to play the part of the matador Pedro Romero in “The Sun Also Rises.” Over the vigorous objections of superstars Ava Gardner, Ernest Hemingway and Errol Flynn, iconic movie mogul Darryl F. Zanuck ordered that Evans keep the gig uttering one of the most famous lines in moviedom, “The kid stays in the picture!” That quote inspired the title of Evans’ autobiography and the documentary about the Evans era in Hollywood.

Flash forward to January 2011, according to an Associated Press story on NPR, the State of Montana filed a lawsuit against National Credit Solutions, alleging the company engaged in unfair and deceptive debt collection practices in violation of the Montana Consumer Protection Act, in connection with its attempts to collect delinquent rental and late fees due Hollywood Video and, its parent, Movie Gallery.  Movie Gallery had been the second largest video and game rental chain in the country with over 4,000 stores in the US and Canada before going bankrupt last year under pressure from category killer Netflix.

According to the AG, many customers never read that part of the script where their delinquent charges had been turned over to the collector and negative information written into their credit profiles. As reported by the AP, National Credit Solutions allegedly filed negative credit reports to credit reporting agencies regarding thousands of renters who owed late fees and had other charges due the Movie Gallery chain without giving them the full picture, never affording them an opportunity to dispute the charges and then hitting them with charges way beyond the cost of popcorn and a large Coke – in the most extreme cases more than $300.

According to Montana AG Steve Bullock, as quoted in the AP story,” It’s crazy to think that a Montanan would be prevented from refinancing their house or buying a new car simply because they returned ‘Caddyshack’ two days late.” I agree. Why should the citizens of Montana – or any other state – be denied the opportunity to film a home movie in anything larger than a 400 square foot apartment because they missed show time on the movie rental red carpet by a couple of days?

The NPR-AP story confirms that as a result of the complaints, the remnant rental company has directed NCS to “rescind those negative credit reports” and send customers appropriate notifications by mail.

However, this cliffhanger doesn’t have a fairytale ending quite yet. According to NCS spokesperson Brett Evans (who I seriously doubt is related to Robert), if the debts aren’t paid within 45 days, the credit scriptwriters will be at it again and the negative information re-writes will be submitted to the credit agencies.

The Attorney General’s office is seeking an injunction against NCS, restitution for the consumers and a penalty of $10,000 for each violation of the Montana Consumer Protection Act.

Image by mrecuay, via Flickr

More on Hollywood Video Collection Violations »

According to the Roanoke Times and the Hutchinson News, the Hollywood Video/National Credit Solutions drama has gone into wide release, coming by phone and postal carrier to cities and towns across Kansas and Virginia.

Things are heating up in Oklahoma as well. The BBB serving central Oklahoma revoked National Credit Solutions’ accreditation.

An investigator for IdentityTheft911 describes his recent efforts to help a woman try to get to the bottom of a collection letter she received from NCS demanding $94.48 due to late fees from videos she supposedly failed to return on time. Impossible, said the woman, as she paid for a premium account that allowed her to rent games for an unlimited amount of time.

The call became even more bizarre as the collection agent explained that many of their initial collection notices are sent by postcard, and that she was unwilling to send written verification of the debt, both of which are violations of the federal Fair Debt Collection Practices Act. She was also assured by the collector (who went by a stage name of Billie Holiday), that if she paid the debt it would be immediately removed from her credit reports. Never mind the fact that the credit reporting agencies prohibit “pay for removal” deals.

Stay tuned for the sequel.  However, regardless of how this story ends, always be alert. Pay bills on time. And know your rights when dealing with debt collectors, which can be a real horror show — definitely not for the faint at heart.

Credit.com offers these script prompts when contacted by a collection agency:

• When you receive a collection call or notice, you have the right to request verification of the debt. Send your request by certified mail and keep a copy for your records.
• Take detailed notes when talking with a debt collector over the phone. Keep those notes in a file with copies of all correspondence from and to the collector.
• Order your credit reports to see if a collection account is listed on your credit reports. You have the right to dispute an inaccurate collection account with the credit reporting agencies as well.
• File a complaint with the Federal Trade Commission and your state’s Attorney General or Department of Consumer Affairs. While these agencies don’t resolve individual disputes, they can step in and take action when they see a pattern of abuse, as the Montana Department of Justice, Office of Consumer Protection has done.

Image by Thomas Hawk, via Flickr