Movie Gallery Lawsuit

Update July 14, 2011

National Credit Solutions Lawsuit:
Attorney General Steve Bullock has finalized a settlement in his lawsuit with National Credit Solutions—the debt collection company that worked on behalf of the now-bankrupt video rental chains Movie Gallery and Hollywood Video. The settlement provides strong protections for over 8,000 Montanans who were negatively affected by this company’s collection tactics. Many of these people were never even aware that their credit scores had been tarnished.

The settlement also provides relief for the Montanans who did discover negative activity on their credit report and who subsequently paid National Credit Solutions in hopes of clearing up their credit score – even if they strongly believed that the alleged “debt” was not fair or valid.

“As far as our case against National Credit Solutions goes, we couldn’t have gotten a better outcome for consumers,” Bullock said.  “The company has agreed to rescind every single negative credit report it issued and never report on these accounts again. Nor is the company allowed to ever come back and try to collect these alleged debts in Montana,” stated Bullock.  “And I’m especially pleased to say that everyone who paid in order to try and save their credit score will be getting all their money back.”

The benefits of the settlement include:

  • National Credit Solutions has permanently stopped all collection activities of any kind relating to Movie Gallery and Hollywood Video accounts involving a Montana resident.
  • All negative credit reports relating to Movie Gallery and Hollywood Video accounts have been rescinded by National Credit Solutions.
  • No future negative credit reports relating to these accounts may ever be issued by National Credit Solutions.
  • Upon request by any Montana resident, or by the Montana Attorney General, National Credit Solutions will provide written confirmation that a negative credit report relating to these accounts has been removed.
  • Those who paid National Credit Solutions will receive a check from the Attorney General’s Office for the full amounts they paid.

For detailed terms of settlement with NCS, you may view the actual document here (PDF).

Keep reading below for details on additional protections for consumers that come out of Attorney General Bullock’s settlement with the liquidating trustee of the bankrupt movie rental chains.

Trustee Settlement:
Attorney General Steve Bullock is pleased to announce a settlement with the liquidating trustee of the bankrupt video rental chains Movie Gallery and Hollywood Video. Through the settlement, former customers of these video rental stores are afforded strong, lasting protections from the collection tactics that were brought to light during Bullock’s investigation and as a result of his January 26, 2011 lawsuit against National Credit Solutions, the failed company’s hired collection agency. This settlement will benefit thousands of Montanans that were former Movie Gallery and Hollywood Video customers.

The benefits include:

  • All negative credit reports have been rescinded. No Montana resident that was a former customer of these video rental chains should have any negative activity on their credit reports related to Movie Gallery, Hollywood Video or National Credit Solutions.
  • No further negative credit reports will ever be issued. No Montana resident that was a former customer of these video rental chains should ever have a future blemish or any negative activity whatsoever on their credit reports related to Movie Gallery or Hollywood Video or National Credit Solutions, even if a different collection agency attempts to collect the debt. Under the settlement, NO FUTURE CREDIT REPORTING IS ALLOWED on these accounts. Furthermore, credit reporting may not be suggested or threatened.
  • No additional collection fees on top of underlying late fees will be allowed. Initially, National Credit Solutions was tacking on an additional $75.00 collection fee to the alleged late fee debt. Under no circumstances is any additional fee allowed in Montana under the settlement.
  • No attempts to collect both the alleged late fee and a product charge will be allowed. In many instances, consumers were charged the alleged late fees that had accrued along with a product charge for the actual DVD or video game that had been rented. Under the settlement, only the lesser of the two fees are allowed to be collected—and only if those fees are valid.
  • Under the settlement, only valid late fee debts are able to be collected in the future. If you are contacted in the future about an alleged late fee debt that you are convinced you do not owe, you may dispute the debt with the collector and demand the debt be verified. You may also contact our office. Remember that under no circumstances may the debt be reported to any credit bureaus. If you have negative activity on your credit report originating from a Movie Gallery or Hollywood video account, you should contact our office immediately.

This office is also finalizing the details of a settlement in its lawsuit with National Credit Solutions – the debt collection company that worked on behalf of the video rental stores. That settlement will also have strong protections for Montana consumers, including those that paid the collection agent with the hope of preserving their credit score.

For detailed settlement terms, you may view the actual settlement document here (PDF).

Check back at this website: We will be updating this page with new information on the National Credit Solutions settlement as soon as that is finalized.


In January 2011, an investigation by Attorney General Steve Bullock’s Office of Consumer Protection uncovered that as many as 12,325 Montanans were facing high collection fees and negative reports on their credit score because they allegedly owed late fees or other charges to the now-defunct Movie Gallery and Hollywood Video rental chains. Most of the thousands of affected Montanans were never made aware of these alleged debts by either Movie Gallery or Hollywood Video before or after they closed their Montana storefronts. Those who did discover the alleged debts did so as a result of checking their own personal credit reports—whether in the course of trying to obtain a loan or through some credit score tracking service.

After discovering these unsavory collection tactics, Attorney General Steve Bullock filed a lawsuit on January 26, 2011 to stop the bankrupt company’s hired collection agency, National Credit Solutions, from demanding high collections fees, which are against Montana law, or filing negative credit reports against consumers without first notifying them.

The Movie Gallery chain bought out Hollywood Video in 2005. At its peak, the chain had 24 locations in Montana, from Whitefish to Sidney. Beginning in late 2009, the company began shuttering its stores in Montana. Its last Montana location closed in the summer of 2010. The company is now in the process of liquidating its assets as part of a bankruptcy.

Our lawsuit grew out of an investigation into numerous complaints filed with our Office of Consumer Protection about National Credit Solutions’ collection actions.

Those complaints follow a similar pattern:

  • Either because they are applying for a loan or because they subscribe to a credit monitoring service, consumers learned that they have a negative credit report filed by National Credit Solutions.
  • When they contact National Credit Solutions, consumers are told for the first time that they supposedly owe late fees or other charges relating to renting movies from Movie Gallery or Hollywood Video.
  • National Credit Solutions then demands full payment of the claimed debt, together with high collection fees. Unless the consumer agrees to pay the full amount, National Credit Solutions refuses to remove the negative credit report.
  • At no time did either Movie Gallery or National Credit Solutions give the consumer any advance notice of the claimed debt, with an opportunity to either pay or dispute the debt.

In his lawsuit, Attorney General Bullock alleges these actions of National Credit Solutions violate Montana’s Consumer Protection Act.

If you have any questions about the two above described settlements, please contact the Office of Consumer Protection at (800) 481-6896 or (406) 444-4500. You can also notify us by email at