In Oklahoma, several thousand residents who had late charges at HollyWood Video or Movie Gallery found their late fee information in the hands of National Credit Solutions in Oklahoma City. The residents had collection notices put on their records without their knowledge, right after both of these companies filed for bankruptcy.
Consumer reporters are investigating the possibility of a scam. It was also found several weeks ago that a Seattle resident had his Discover credit card limit cut from $8,700 to a mere $600 because of $166 in late fees to Hollywood Video. Even more interesting is that after 21 days, Hollywood Video did not consider a rental late, but as sold for $25 further leading to the suggestion of possible illegal activity.
Several of those affected have come forward after contacting the NCS in Oklahoma to dispute the late fees that went back as far as 3 years. Hollywood Video continued to let customers rent movies without informing them they owed late fees.
Attorney Generals in at least six states so far have received complaints from thousands of consumers regarding notices sent to them from National Credit Soluitions. The credit bureau is currently being sued by the state of Montana.
Investigations of possible criminal charges of fraud against Hollywood Video are currently underway.