For as much as Jarrid Lezcano enjoyed the video game "Godfather 2," he never expected it would end with a fight like this.
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"Definitely did not," said Lezcano. "Not at all."
The Nashville man rented the game last year from Hollywood Video and said he was surprised when a debt collector, National Credit Solutions, called and demanded a $98 late fee.
"They went right off the bat, straight for the jugular, claiming that if that I didn't pay this they were going to put this on my credit report and that, to me, is unacceptable," said Lezcano.
The debt collection agency filed negative reports to credit agencies for thousands of customers nationwide who owed late fees or had other charges pending when Movie Gallery, the parent company of Hollywood Video, went bankrupt last year.
Montana filed a lawsuit Wednesday against National Credit Solutions, alleging the company engaged in unfair and deceptive debt collection practices in violation of the state's Consumer Protection Act.
"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," state attorney general Steve Bullock said in a statement.
Bullock's office alleges that National Credit Solutions filed the negative credit reports without informing the customers, never gave them a chance to dispute the fees and then tried to charge them "exorbitant" fees on top of what they reportedly owed more than $300 in the worst cases.
National Credit Solutions' managing member, Brett Evans, said the company did nothing illegal. Movie Gallery told the debt collector that it notified customers with outstanding fees before directing National Credit Solutions to make credit reports on the delinquent payments, Evans said.
Movie Gallery was once the nation's second-largest video and game rental chain with more than 4,000 stores in the U.S. and Canada, but it filed for bankruptcy last February as its retail sales slipped against Netflix's mail-order business, DVD kiosks and Internet-based services.
National Credit Solutions is trying to collect from Movie Gallery and Hollywood Video customers nationwide, though the exact number isn't clear. Many don't know that their late fees have been turned over to a debt collection agency, or that their credit reports may have a new black mark.
The customers who learned the hard way have complained, and what's left of the video rental company has now directed the debt collection company to rescind those negative credit reports and send those customers notifications by mail, Evans said.
If the debts aren't paid within 45 days of the notification letter, the credit reports will be filed again, Evans said.
The state attorney general's office is asking a judge to grant an injunction against National Credit Solutions, order the company to provide restitution to the video store customers and punish the company with a $10,000 fine for each violation of law.
Evans said it's not illegal to file credit reports as long as Movie Gallery first notified those customers of their debt, which he said the company told him it had done.
"We feel like we're acting legally," Evans said. "We're a servicer of debt. We get contacted, we get asked to do something, we provide a service."
As for Lezcano, the Nashville man filed a complaint with the state and the Federal Trade Commission, convinced he isn't the only former customer who will discover a problem.
"If you are a Hollywood Video customer, I would definitely check my credit report just to be safe," said Lezcano.
The Federal Trade Commission requires companies like National Credit Solutions to abide by the Fair Debt Collection Practices Act
A consumer who wants to file a complaint against a company can contact the Tennessee Collection Service Board by filling out and sending a form
to the board, calling the board at 615-741-1741, or e-mailing firstname.lastname@example.org.