(DES MOINES, Iowa) Attorney General Tom Miller announced that Iowa is part of a settlement with 50-state attorneys general to resolve allegations of unfair debt collection practices on customer accounts for Hollywood Video and its parent company, Movie Gallery.
After Hollywood Video filed for bankruptcy in 2010, its customer accounts were turned over to debt collector National Credit Solutions, LLC (NCS) for collection. Consumers nationwide, including Iowa consumers, complained about NCS practices. Complaints included these common allegations:
- Customers did not owe the late fees NCS sought to collect;
- “Double charges,” where the video store was seeking to hold customers responsible for both late fees and the cost of the rental product, even where the customer had returned the video;
- NCS reported negative credit information to credit bureaus, without providing consumers advance notice or the opportunity to challenge the debt. Many consumers first discovered the claimed debt because their credit was negatively affected when either they were denied for a credit application or had their credit card limits lowered.
The company once operated video rental stores in all 50 states, including 49 stores in Iowa. Company records show there were nearly 630,000 customer accounts in Iowa.
Under the settlement, filed in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, the bankruptcy trustee agrees to provide immediate consumer relief by:
- Rescinding all previously submitted credit reports with negative information;
- Not submitting any further credit reports;
- Not charging collection fees or interest on principal amounts consumers owe;
- Not charging double for late fees (late rental fees and full price for items that were supposedly not returned);
- Complying with the Fair Debt Collection Practices Act and protecting consumers from future abusive practices in collection of the accounts.
Any Iowa consumer contacted by a debt collector about fees allegedly owed to Hollywood Video or Movie Galley, or discover negative information on their credit report related to Hollywood Video or Movie Gallery, are encouraged to file a complaint with the Iowa Attorney General’s Consumer Protection Division if they believe they do not owe all or part of the amount being sought. For complaints or information: call 515-281-5926 in Des Moines, or toll-free at 888-777-4590. Consumers can also e-mail complaints to: firstname.lastname@example.org. For more information: www.IowaAttorneyGeneral.gov.
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