Montana sues collection agency

Keith Loria Jan. 27, 2011, 2:29am


HELENA, Mont. (Legal Newsline) - Montana Attorney General Steve Bullock has filed a lawsuit to stop a collections agency that he says is demanding high collections fees for late fees and other charges from a now-defunct video rental chain.

National Credit Solutions, Bullock, on behalf of the now shuttered Movie Gallery/Hollywood Video rental chain, is allegedly demanding the high collection fees, which are against Montana law, or filing negative credit reports against consumers without first notifying them.

Movie Gallery bought out Hollywood Video in 2005, boasting 24 locations in Montana at its peak. The company began closing those stores in late 2009, with the last Montana location closed in summer 2010.

As part of a bankruptcy, the company has now begun the process of liquidating its assets. As part of the liquidating process, the names of 12,235 Montanans with outstanding late fees or charges were turned over to the Oklahoma City-based National Credit Solutions.

Bullock's lawsuit follows numerous complaints from Montanans about National Credit Solutions' practices, which allegedly include filing negative credit reports against the consumers. The company then allegedly demands full payment of the claimed debt along with high collection fees. If consumers do not agree to pay the full amount, National Credit Solutions allegedly refuses to remove the negative credit report filed against the consumers.

Additionally, Bullock alleges, Movie Gallery and National Credit Solutions failed to give consumers advance notice of the claimed debt or an opportunity to pay or dispute the debt.

Because of its actions, Bullock believes that National Credit Solutions is in violation of Montana's Consumer Protection Act. He is seeking a court order to protect consumers that requires National Credit Solutions to comply with Montana law during its collection process.

Bullock is also seeking a judgment requiring National Credit Solutions to repay fees paid by consumers who have already paid unlawful collection fees.

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