Hollywood Video Scam Preys on Former Customers

The Hollywood Video store along Manchester Road  in Ballwin maybe long gone, but residents are still being called for bogus late fees, alerts the Better Business Bureau. 

BBB Investigator Bill Smith looked into complaints from St. Louis area consumers and found that there have been 1,400 complaints to the BBB about the collectors, who are working for a company hired by the bankruptcy trustee for Hollywood Video's owner, Movie Gallery.

Smith said about a dozen people, including at least one Ballwin resident, have complained from the St. Louis area, but many more may have paid the fees, which ranged from less than $50 to more than $100, after receiving a bill from West Bay Acquisition.

Today's BBB release summarizes Smith's findings:

St. Louis, Mo., July 5, 2012 – Several former customers of Hollywood Video stores in the St. Louis area 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 the Better Business Bureau (BBB) they do not owe anything. Some said they were worried that the collection companies would try to damage their credit records over the bogus bills.

“I am not paying this; no way,” a woman from St. Charles, Mo., told the BBB last week after receiving a collections notice for $28 from West Bay Acquisitions of Cranston, R.I.

“I do not owe anything to Hollywood Video and never before have been notified that I do,” said a former customer from St. Louis who was sent a letter last month by West Bay Acquisitions asking that he pay a $21 overdue bill. The consumer demanded that the business not take any action that might damage his credit rating.

About a dozen consumers from the St. Louis area have filed complaints in recent months against West Bay Acquisitions and a second company, Universal Fidelity of Houston, Tex. 

The two companies are 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 St. Louis area complaints represent a small percentage of the more than 1,400 complaints filed nationally in the past 12 months against West Bay and
Universal Fidelity. Most of those complaints involve what consumers claim are
bogus Hollywood Video or Movie Gallery charges. While many of the complaints
involve bills of less than $50, several concern bills of more than $100.

West Bay has an “F” grade with the BBB, the lowest grade possible.  Universal Fidelity has a “C” grade.

Michelle Corey, 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 already have paid," Corey said. "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 the trustee.

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 claim.

A former Hollywood Video customer from Ballwin, Mo., said West Bay billed her
$113 for several items she allegedly checked out and never returned. But the final time she visited the store before it closed in 2009, a clerk reportedly told her she had a zero balance. She now believes the items may have been stolen from the store after the closing was announced. “I just happened to be the sucker who was the last person to rent ‘On The Beach,’” she said. After she filed a BBB complaint, West Bay agreed not to pursue the claim.

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 (www.ftc.gov) or the BBB.
• Check out a company’s BBB Business Review by going to www.bbb.org or by calling 314-645-3300.

About the BBB

The BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior.  The BBB provides objective advice, free BBB Business Reviewson more than 4 million companies, 11,000 charity reviews, dispute resolution services, alerts and educational information on topics affecting marketplace trust.  Please visit www.bbb.org for more information.