If you get a phone call from a debt collector who says you owe money on your old Hollywood Video account, don’t be too quick to pay up.
Thousands of customers have received such calls, including a former coworker of mine who received a letter saying her family owed $162 on videos that were never returned to Hollywood Video, which has since closed up shop. She had never previously received any notices and returned all rented videos before the store went out of business.
Now, two years later, she received this notice. When her husband called to investigate, the debt collector told him one video was still missing and he could settle the whole matter for $95—but only if he made an immediate credit card payment. He declined.
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It turns out Montana’s attorney general is already on the case and has filed a lawsuit against the debt collector. Other state attorney generals are now investigating as well.
Despite the scent of a scam, consumers could run into trouble if they ignore the debt inquiries altogether, because the debt collector has allegedly been filing negative reports with credit bureaus, possibly unfairly. That puts consumers receiving these calls in a tough position.
Derek Schmidt, attorney general for Kansas, urges consumers not to give any money or information to the debt collector. Instead, he urges Kansans to report the calls to his office. In general, he says, people should only pay debts they are sure are legitimate, and they shouldn’t let anyone rush them into a quick payment.
The Better Business Bureau adds that instead of ignoring calls and letters regarding old Hollywood Video debts, consumers should ask for written proof of the debt, dispute it in writing (without providing any personal information such as credit card numbers), and keep copies of all documents.