July 8, 2012 – Roanoke, VA – A
number of former customers of Hollywood
Video stores in the coverage area of BBB Serving Western VA are
among hundreds of consumers nationwide who say they have been contacted by debt
collectors claiming they still owe the defunct business for overdue rentals.
The former customers have told BBB
they do not owe anything and they were worried that the collection companies
would try to damage their credit records over the bogus bills.
Over a dozen consumers from the BBB
Serving Western VA area have filed complaints in recent months against Universal
Fidelity of Houston, Texas. The company is working on behalf of the bankruptcy
trustee for Movie Gallery, owner of the closed
Hollywood Video chain, trying to collect what the trustee believes may be
millions of dollars in unpaid bills.
The BBB Serving Western VA complaints
represent a small percentage of the more than 1,400 complaints filed nationally
in the past 12 months against West Bay, a second collection agency representing
Hollywood Video, and Universal Fidelity. Most of those complaints involve what
consumers claim are bogus Hollywood Video charges.
West Bay has an “F” grade with the BBB, the lowest grade possible. Universal
Fidelity has a “C” grade.
Julie Wheeler, BBB president and CEO,
said consumers should not be pushed into paying bills they do not owe. “It’s
one thing if a customer still owes money for a past-due rental, but it’s
another if these debt collection companies are pressing them -- even
unintentionally -- to pay bills they never owed or have already paid. The
enormous number of complaints seems to indicate that something is wrong.”
The recent flurry of complaints comes
nearly three years after local Hollywood Video stores were shut down and two
years after the business filed for bankruptcy.
One year ago, the company’s bankruptcy
trustee signed an agreement with officials of all 50 states promising to take
action that Kentucky’s
attorney general said would help protect consumers from “abusive collection
practices” and give those consumers a better opportunity to object to disputed
charges. The agreement specifically bans Hollywood Video collection agencies
from issuing notices to any credit reporting agency and prohibits the
collection of additional fees or interest charges. They also promised not to
pursue disputed cases without an investigation.
That agreement followed numerous
complaints involving two other independent debt collection companies hired by
Since the agreement, the complaints
against West Bay and Universal Fidelity have
continued. BBB offices in Boston, which handles
the West Bay
complaints, and Houston,
which handles the Universal Fidelity complaints, both say the two businesses
have been resolving their complaints. Records show that in most cases, the
companies have agreed to stop pursuing payment if the former customer disputes
The BBB offers the following advice
to consumers contacted by a debt collection firm:
- Know your rights. Under federal and state law,
debt collectors are prohibited from using threats of violence or harm
against a person, property or reputation. They cannot threaten to garnish
your wages unless they intend to do so, and cannot use phone calls to
repeatedly harass you.
- Ask for written proof of your debt. By law,
a debt collection agency must provide you with a validation notice within
five days of contacting you about the debt.
- Tell the collector in writing to stop contacting you. Under federal law, a debt collector cannot continue to contact you –
at work or home – once you have told them in writing to stop.
- If the company continues to badger you, you can file a complaint with your
state’s attorney general, the Federal Trade Commission (http://www.ftc.gov/)
or the BBB.
- Check out a company’s BBB Business Review by going to www.bbb.org or by calling 800-533-5501.
If you need more
information, contact the BBB at (540) 342-3455 or (800)
533-5501. You can also visit www.bbb.org.
Follow us on Twitter at twitter.com/BBB_WesternVA.