We just received (3/12/12) a collection letter from Universal Fidelity, LP, the legal successor of Hollywood Video/Movie Gallery, Inc. (UFLP). The amount is $69.48. We do not owe a debt to Hollywood Video and know this information to be false. After merely googling Universal Fidelity LP, I found that we are not alone. Many others have written in and complained that this is a scam. After find others in a similar situation I feel better, but I am concerned as to what these false claims can do to my credit report. The letter was signed by a C. Hearn, Director of Payment Control. The very fact that the collection agencys address is a P.O. Box is fishy and highly questionable. Then of course there is the question as to why, three years later since Hollywood Video closed that they would make such claims. I guess they figure that if even only 10% of the people that they send these bogus letters out to send them payment it will certainly cover their expenses for this scam. When I googled C. Hearn, Universal Fidelity the following came up:
This business is not currently rated. BBB has recently received numerous complaints against this business, and will issue a rating after it has fully evaluated them.
Customer Complaints Summary:
238 complaints closed with BBB in last 3 years | 221 closed in last 12 months
Total Closed Complaints
Advertising/Sales Issues 3
Billing/Collection Issues 218
Problems with Product/Service 17
Total Closed Complaints 238
Additional Complaint Information
The BBB is receiving a pattern of complaint activity regarding unpaid fees. BBB complainants allege that the letter they are receiving from Universal Fidelity states they are the Legal Successor to Hollywood Video and consumers are to pay the fees owed with no description of the charges. The letter also alleges that Unless you notify this office within 30 days after receiving your initial notice that you dispute the validity of the debt or any portion thereof, this office will assume this debt is valid. All complainants mentioned they did not owe any money to Universal Fidelity or Hollywood Video.
There are roughly 3,000,000 accounts/consumers involving all 50 states that potentially could be contacted via a letter. There are several collection agencies that have been contracted as 3rd party collectors. These collectors did not buy the debt but rather are contracted by the Trustee of the Agreed Order.
The Third Party Collectors should not be reporting any consumer to the credit reporting agencies for late fees associated with Hollywood Video. The Order states that the Collectors can only collect on late fees. They are not allowed to collect for unreturned videos or add any additional collection fees.
If the account had both late fees and unreturned product fees for the same account, then the collection would be for the lesser of the two charges for the rental item.
I think I smell a rat