PHOENIX (Legal Newsline) - Arizona Attorney General Tom Horne issued a consumer alert on Friday related to the consumer debt collection efforts by Hollywood Video and Movie Gallery for non-return or late fees on videos.
Horne brought attention to the agreement made between the 50 states, the District of Columbia and companies collecting on the behalf of Hollywood Video.
"My office has recently been getting a number of consumer inquiries about how Hollywood Video and Movie Gallery are going about the collection of supposed debts," Horne said.
"Some consumers have been confused because they did not rent a video nor are responsible for late fees. Consumers should know what restrictions apply to companies collecting on Hollywood Video and Movie Gallery debts under an agreement made by 50 states and the District of Columbia regarding those collection practices."
Under the terms of the agreement, agencies collecting debts that are reportedly owed to Hollywood Video may not submit any reports to credit reporting agencies or bureaus, collection agencies may not tell customers that failure or refusal to pay could result in adverse credit reporting, and no interest or collection fees may be added to the principal amounts owed by consumers on collection accounts resulting from debts to Hollywood Video.
Collectors must send consumers written validation notices that note how much money is owed within the five days of first contact. The notice must include the name of the creditor the money is owed to and how to move forward if the consumer does not think he or she owes the money.
Arizona law requires that collection agencies provide, upon request, the time and place of the debt's creation, the services, merchandise or other item of value provided in exchange for the debt, and the date the account was turned over from the creditor to a collection agency. Also, if requested, the collection agency must freely provide a copy of any documents from its records that contains the information. If upon receiving the debt evidence, the consumer confirms he or she does not owe the debt, the agency may not continue with collection efforts and must look into the consumer's claim.
Consumers may tell the debt collector in writing to stop contacting them, which does not get rid of the debt but should stop frequent contact. Collectors receiving such a letter may only contact consumers again to tell the consumer there will be no further contact or to let the consumer know the creditor plans to take a particular action, such as filing a lawsuit.