Attorney General encourages Montanans to learn more at his website, check their credit rating
HELENA – On the heels of numerous complaints from consumers across the state and an investigation by his Office of Consumer Protection, Attorney General Steve Bullock announced at a press conference Wednesday that he has filed a lawsuit against National Credit Solutions, a debt collector working for the now-defunct video rental chains Movie Gallery and Hollywood Video.
Bullock’s lawsuit, filed today in Helena District Court, alleges the collection agency unlawfully attempted to collect money from customers and sent negative credit reports to the national credit reporting bureaus, without ever notifying the consumer of the alleged debt. The investigation uncovered that 12,325 Montanans have been affected, unbeknownst to many of them.
“It’s our belief that this debt collector — who made no attempts to contact consumers — has blatantly violated our laws and bullied Montanans. We will hold them accountable,” said Bullock. “It’s crazy to think that a Montanan would be prevented from refinancing their house or buying a new car simply because they returned Caddyshack two days late.”
Hollywood Video and Movie Gallery had 24 storefront locations across Montana, all of which closed in 2009 and 2010 as their parent company went bankrupt. After the stores closed, alleged late fees and other charges related to movie rentals were sent to the collection agency.
In complaints with Bullock’s office, Montana consumers allege they were never notified of the alleged debt by the video rental stores or the collection agency. When they contacted National Credit Solutions, they were told they must immediately make full payment of the claimed debt along with exorbitant collection fees. If the consumer doesn’t agree to pay the full amount, National Credit Solutions refuses to remove the negative credit report.
Consumers were surprised to learn of the adverse credit reports when they applied for a loan or through a subscription with a credit monitoring service.
Bullock’s lawsuit alleges serious violations of Montana’s Unfair Trade Practices and Consumer Protection Act by National Credit Solutions, including:
- Consumers have not been given fair notice of the claimed debt, or an opportunity to either pay or dispute it.
- National Credit Solutions has filed negative credit reports without notifying consumers.
- The collection agency demands payment of unlawful collection fees.
Bullock added that any creditor has the right to lawfully collect a legitimate debt. In doing so, the collection agency may not demand unlawful collection fees and must give the consumer fair notice of the claimed debt and a chance to pay or dispute it.
Anyone who rented movies from Movie Gallery or Hollywood Video might be one of the more than 12,300 Montanans who, unbeknownst to them, have a negative credit report from National Credit Solutions. Montanans seeking to find more information — including ways to check your credit report for free — should visit www.consumerprotection.mt.gov.