Attorney General Schneider Announces Hollywood Video Debt Collection Settlement

May 12, 2011

AUGUSTA ?Maine Attorney General William J. Schneider today announced a settlement to resolve allegations of unfair debt collection practices for Hollywood Video and Movie Gallery customer accounts.

The customer accounts at issue involve Hollywood Video rental stores in all fifty states and the District of Columbia and approximately 3 million consumers of which 14,531 are Mainers.

When Hollywood Video filed for bankruptcy in 2010 the customer accounts were referred to independent debt collection agencies to collect outstanding late fees and product fees.

A spike of consumer complaints emerged with common claims that: 1) disputed the debts were ever incurred or owed; 2) amounts sought were greatly in excess of any late fees that might have been incurred; and 3) adverse credit information was reported to credit bureaus without prior notice to customers that amounts were owed and without opportunity to challenge the debt.

?Debt collection and resulting credit reports can have a serious impact on consumers. It is very important that debts are collected in a fair and legal manner,? said Attorney General Schneider. ?This agreement provides immediate consumer relief from improper collection practices.?

Under the terms of the settlement, Hollywood Video will rescind any outstanding adverse credit reports and refrain from reporting adverse information to reporting agencies in the future. If a consumer disputes the validity of a collection notice, Hollywood Video will immediately cease collection efforts until the account is reviewed and verified to be accurate. In addition, in instances where Hollywood Video asserts that a consumer owes both a late fee and product fee, Hollywood Video will seek to collect only the lesser of the two fees and will forego collection of any interest or collection fees on the account.

Any future purchaser of the Hollywood Video customer accounts will be bound by the terms of the agreement.

Consumers who have complaints about individual accounts can contact Hollywood Video directly at Movie Gallery, Inc., Hollywood Entertainment Corp., 7405 SW Tech Center Drive, Suite 130, Tigard, Oregon.

Consumers can contact the Office of the Attorney General?s Public Protection Division for additional information or assistance at (207) 626-8812.


CONTACT: Brenda L. Kielty (207) 626-8577