Zombie debt collections: Hollywood Video is dead, but bills still haunt consumers

The stores may be gone, but people are still getting bills from the defunct video store chain.

Talk about Red Tape: Consumers across the country say they are being harassed into paying bills they don’t owe to a company that no longer exists. And it’s not the first time. Like a monster in a bad horror flick, every time this Hollywood Video debt collection controversy seems to be killed, it keeps coming back to life.

When Hollywood Video and its parent, Movie Gallery, went out of business in 2010 and declared bankruptcy, they had only one real asset: unpaid fees. About 3 million U.S. residents owed money to the firm — a lot of money — nearly a quarter of a billion dollars, according to the Rhode Island attorney general’s office. But attempts to collect that money on behalf of Hollywood Video’s creditors have become a series of bad horror flicks to former customers, who claim they are being repeatedly harassed by debt collectors waving bills the consumers don’t owe. And now, an NBC News investigation of 500 complaints filed against one of those firms in the past 90 days — Universal Fidelity — shows that consumers accuse the company of everything from bullying to threatening to ruin their credit, despite promises to all 50 state attorneys general that it would never do so.

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