Zombie Debt Collections: Hollywood Video Bills Haunt Consumers

Consumers across the country say they are being harassed into paying bills they don’t owe to a company that no longer exists. And it’s not the first time.

Hollywood Video and its parent company, Movie Gallery, went out of business in 2010 and declared bankruptcy. About 3 million U.S. residents owed money to the firm in the form of unpaid fees, in the amount of nearly a quarter of a billion dollars, according to the Rhode Island attorney general’s office. But consumers claim that they are being repeatedly harassed by debt collectors about bills the consumers don’t owe. One of the debt collection firms, Universal Fidelity, had over 500 claims filed against it in the last 90 days. They accuse the company of bullying tactics, threatening to ruin their credit and more.

“Not in business to harass”

“Everybody here is trained in customer service. … We are not in business to harass, harangue or threaten people”

– Paul Farinacci, president and chief executive of Universal Fidelity.

In 2011, complaints appeared for the same problem against Oklahoma based National Credit Solutions. Consumers claimed that their credit reports were being hurt by $39 late fees that they didn’t owe. The company that handled Hollywood Video’s bankruptcy reached a settlement with the attorney general’s of all 50 states and promised to remove any negative credit items from consumer credit report and to change their tactics. They hired a new debt collection agency, Universal Fidelity, to handle the collections and clean up the process.

Now, the same thing is happening again. Since June 1st, 430 of the roughly 1,000 complaints that have arisen, have been filed against the collection agency.

The Virginia BBB put out a consumer alert on the issue: BBB Alert: Consumers Say Collectors Hounded Them For Bogus Hollywood Video Late Fees

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Zombie debt collections: Hollywood Video is dead, but bills still haunt consumers