The once lucrative video rental chain, Hollywood Video, is back in the hot seat again. This time the bankrupt company is in trouble for attempting to collect on old debts, many of which may not even be legitimate.
After their 2010 bankruptcy filing, Hollywood Video’s efforts to collect on suspicious debts is leaving many consumers dumbfounded by charges they claim were never accumulated. Universal Fidelity, one of the collection agencies authorized by the bankruptcy court, has been sending out collection letters to prior customers who allegedly owe the company money. Now permanently closed for business, many prior Hollywood Video customers say they had no responsibility in acquiring such charges.
After 4,000 or more consumer complaints over the letters mailed by Universal Fidelity, the collection company is facing some heat. Consumers who question the legitimacy of alleged debts can file an appeal on Fidelity’s website. Consumer awareness groups are also working to educate those affected of their rights in the collection of old or alleged debts. First, Universal cannot report unpaid debts to a credit agency until they have been verified. Second, they cannot charge interest or delinquency fees on the alleged debts. Last, Universal must adhere to the Fair Debt Collection Practices Act.
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