When we were working through the FTC’s debt collection complaints data, an interesting statistical blip we noticed were pockets of complaints that all seemed to be related to a single creditor.

It was as if, say, an agency received some paper from a creditor that maybe wasn’t as clean as it should have been. Take, for instance, the case of Hollywood Video.

In the hopes of recouping some of its bad debt losses during its trying bankruptcy, Hollywood Video may have flooded the collection market with a lot of paper. Trouble is, it may not have been the cleanest paper, and now Hollywood Video, and the agencies collecting on its behalf, are under serious scrutiny.

Arizona Attorney General Tom Horne has even gone so far as to issue a Consumer Alert:

“My office has recently been getting a number of consumer inquiries about how Hollywood Video and Movie Gallery are going about the collection of supposed debts. Some consumers have been confused because they did not rent a video nor are responsible for late fees.

Consumers should know what restrictions apply to companies collecting on Hollywood Video and Movie Gallery debts under an agreement made by 50 states and the District of Columbia regarding those collection practices.”

The provisions include the following:

  • No Adverse Reporting to Credit Bureaus. The collection agencies collecting debts reportedly owed to Hollywood Video and Movie Gallery will not submit any reports to any credit reporting agency or bureau.
  • Collection Agencies May Not Threaten Adverse Credit Reporting. Any collection agency utilized to collect the Hollywood Video or Movie Gallery accounts may not represent to any customer that their failure or refusal to pay an account could result in adverse credit reporting.
  • No Collection Fees or Interest. No collection fees or interest will be imposed on or added to the principal amounts owed by consumers on any of the collection accounts resulting from Hollywood Video and Movie Gallery debts.

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