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News Release

For Immediate Release
May 9, 2011

Contact:
Constance N. Stratton, Senior Assistant Attorney General
Consumer Protection & Antitrust Bureau
(603) 271-3643

Hollywood Video/Movie Gallery

Attorney General Michael A. Delaney announced today that New Hampshire, along with 49 other states and the District of Columbia, has entered into a multistate settlement to resolve allegations of unfair debt collection practices for Hollywood Video and Movie Gallery customer accounts.

Hollywood Video and/or Movie Gallery had video rental stores in all 50 states with 21 outlets in New Hampshire. It filed for bankruptcy in 2010, and its accounts receivable were assigned to National Credit Solutions (NCS), a debt collection agency.

After NCS took over, consumers reported numerous problems. Most significantly, they said NCS reported negative credit information to credit bureaus on a widespread basis, without providing consumers advance notice or the opportunity to challenge the debt. Many consumers first discovered the claimed debt because their credit was negatively affected when either they were denied for a credit application or had their credit card limits lowered. Many of the estimated 3.3 million customers from all 50 states and the District of Columbia said they never realized they had credit damage until they were denied credit or were given limited credit.

In the agreement, the bankruptcy trustee, Movie Gallery, Inc. Bankruptcy First Term Lenders Liquidating Trust, agrees to provide immediate consumer relief by:

  • Canceling all previously submitted credit reports.
  • Not submitting any future credit reports.
  • Not charging collection fees or interest on principal amounts consumers owe.
  • Not charging double for late fees.
  • Protecting consumers from future abusive practices in collection of the accounts.

The settlement affects approximately 3.3 million total consumers in all 50 states and District of Columbia, including 8,175 New Hampshire consumers. The settlement applies only to the trustee; it does not affect any third party debt collection practices.

The settlement, or Stipulation and Agreed Order, has been filed with the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

Attorney General Delaney said, "This agreement will protect consumers who may have returned a rental movie a couple of days late from having negative credit information on their credit history. My office is keenly aware of the devastating effect an unwarranted negative credit report can have on individuals in these difficult economic times."

Consumers who have a complaint against any business may file a complaint electronically by logging onto www.doj.nh.gov/consumer/ and clicking on "Filing a Consumer Complaint." Consumers can also call the Consumer Protection Hotline at 1-888-468-4454 and request that a complaint form be mailed to them.


New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301
Telephone: 603-271-3658