ERRONEOUS BMG MUSIC BILL
Complaint
JERMY F
Country: United States
Yesterday I received a credit alert advising me that there was derogatory information reported on my credit report on 3/1/10 by a company known as National Recovery Agency (NRA). The debt was for $36. I called the agency and they advised me that this debt derived from an order that I placed with BMG music back in 2006. I advised them that this debit is erroneous and someone clearly used my name without my permission in order to obtain these goods. With the advent of online file sharing, I have not purchased a CD in over a decade.
I advised the agent that I was never informed of this outstanding debt from BMG music. It has been four years! I was never contacted by phone or mail. I never supplied my signature or my social security number. They stated that they were not legally obligated to prove that I authorized this transaction, so I just need to pay it immediately. This issue has caused my score to drop by as much as 60 points. Do I have any legal recourse in this matter?
I advised the agent that I was never informed of this outstanding debt from BMG music. It has been four years! I was never contacted by phone or mail. I never supplied my signature or my social security number. They stated that they were not legally obligated to prove that I authorized this transaction, so I just need to pay it immediately. This issue has caused my score to drop by as much as 60 points. Do I have any legal recourse in this matter?
Comments
You will find many complaints against BMG here, including many alleging credit damage when they never even had an account with them. (Complaints continue at very high levels right up to Nov. 5, 2010, then stop. Not clear why. Maybe consumeraffairs collects them in batches.)
http://www.consumeraffairs.com/entertainment/bmg.htm
There are several debt collectors reported to be collecting on suspect BMG "debts".
The two main ones are NRA Group, and National Credit Solutions, but there are several smaller ones as well.
These list numerous FDCPA or FCRA lawsuits against them.
http://dockets.justia.com/search?query=NRA+Group
http://dockets.justia.com/search?http://docke ... redit+solutions
Both are reported in numerous complaints to routinely damage credit over trivial often unowed amounts, make deceptive statements when contacted, attempt to evade requests for validation, and fail to provide any "validation" that would indicate any actual verification with the original creditor. The above actions could subject them to liability under FDCPA and FCRA.
BMG bought Columbia House, and then apparently shut down their music club business a couple years ago. Columbia House had numerous complaints of deceptive or fraudulent "negative option" order cramming, and appears to have accepted applications for their negative-option marketing "memberships" from anyone who could scribble with a crayon, with no proof of identity like SSN required.
Complaints against them show up alleging unordered discs sent to people who never even signed up with them, so they may have also had fraudulent telemarketers setting up "accounts", maybe to make their numbers or get commissions. FTC also took action against them for violation of the Do Not Call law, when they allegedly continued for months to call former customers who had cancelled. Using telemarketing to put pressure on customers to order, including cramming unordered products, appears in many complaints from that period.
One news item reported that some guy was charged with fraud for opening several thousand teaser accounts under different names, and had been selling the CDs at local flea markets, so clearly Columbia House made no attempt to properly identify who their customers were. Their debt collectors are basically guessing at who owes these alleged "debts", even though they routinely put damaging collection posts on credit reports.
One indication of a scam showing up in many complaints is that Columbia House may have falsely claimed consumers hadn't "met their agreement", supposedly the required orders agreed to in exchange for the teaser deal, and owed a termination fee. These were basically nuisance amounts, usually in the $30 to $50 range, but debt collectors only showed up in connection with such claims several years after many consumers claim they had in fact ordered the required products, with "interest" or "fees" inflating the claim to around $150.
The wide number of such complaints suggests that this was run as an intentional scam, with the delay possibly used to ensure that consumers would not have any records, and to allow for the inflated "termination fee", perhaps so the "debts" could be sold off for more to debt collectors.
The above complaint patterns indicate that you should be very wary of any "debt" allegedly from BMG, certainly if you never had such an account, and also if you believe an old account was paid years ago. Even though Columbia House was shut down, this is an active scam now run by the debt collectors, with complaints ramping up over the last 2 years, accompanied by rising levels of federal lawsuits against the debt collectors.
If you have a suspect item on your credit report, you can dispute it through the credit reporting agency (CRA), Trans Union, Experian, or Equifax.
You can also obtain the name and address of the data furnisher (presumably BMG) from the CRA, and dispute with them directly, but do NOT leave out disputing through the CRA, since this is a requirement should you decide to sue under FCRA.
If you are having problems with a debt collector attempting to collect on an unowed debt, or if they fail to prove it is owed but continue to damage your credit, file complaints with FTC and your state Attorney General, and find a consumer attorney with experience in FDCPA and FCRA litigation. Both laws allow courts to award both damages and attorney fees, so you may be able to find an attorney to take such cases on contingency.
You might try www.naca.net
Or you might contact edcombs.com, which handles consumer protection class action lawsuits. They recently filed an FDCPA lawsuit against NRA Group.
As noted in the many BMG complaints, it appears their goal was to coerce payment of the trumped-up fees by using systematic credit damage to pressure consumers to pay without disputing. Since the BMG complaints indicate they often damaged credit of erroneously identified consumers, it is likely they may also have done so with these "debts".
http://www.doj.mt.gov/news/releases2011/20110127.asp
"ATTORNEY GENERAL STEVE BULLOCK
STATE OF MONTANA
FOR RELEASE: January 27, 2011
Bullock Sues Collection Agency Working for Video Rental Stores, Over 12 Thousand Montana Accounts Sent to Collection
Attorney General encourages Montanans to learn more at his website, check their credit rating
HELENA – On the heels of numerous complaints from consumers across the state and an investigation by his Office of Consumer Protection, Attorney General Steve Bullock announced at a press conference Wednesday that he has filed a lawsuit against National Credit Solutions, a debt collector working for the now-defunct video rental chains Movie Gallery and Hollywood Video.
Bullock's lawsuit, filed today in Helena District Court, alleges the collection agency unlawfully attempted to collect money from customers and sent negative credit reports to the national credit reporting bureaus, without ever notifying the consumer of the alleged debt. The investigation uncovered that 12,325 Montanans have been affected, unbeknownst to many of them.
"It's our belief that this debt collector — who made no attempts to contact consumers — has blatantly violated our laws and bullied Montanans. We will hold them accountable," said Bullock. "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."
Hollywood Video and Movie Gallery had 24 storefront locations across Montana, all of which closed in 2009 and 2010 as their parent company went bankrupt. After the stores closed, alleged late fees and other charges related to movie rentals were sent to the collection agency.
In complaints with Bullock's office, Montana consumers allege they were never notified of the alleged debt by the video rental stores or the collection agency. When they contacted National Credit Solutions, they were told they must immediately make full payment of the claimed debt along with exorbitant collection fees. If the consumer doesn't agree to pay the full amount, National Credit Solutions refuses to remove the negative credit report.
Consumers were surprised to learn of the adverse credit reports when they applied for a loan or through a subscription with a credit monitoring service.
Bullock's lawsuit alleges serious violations of Montana's Unfair Trade Practices and Consumer Protection Act by National Credit Solutions, including:
Consumers have not been given fair notice of the claimed debt, or an opportunity to either pay or dispute it.
National Credit Solutions has filed negative credit reports without notifying consumers.
The collection agency demands payment of unlawful collection fees.
Bullock added that any creditor has the right to lawfully collect a legitimate debt. In doing so, the collection agency may not demand unlawful collection fees and must give the consumer fair notice of the claimed debt and a chance to pay or dispute it.
Anyone who rented movies from Movie Gallery or Hollywood Video might be one of the more than 12,300 Montanans who, unbeknownst to them, have a negative credit report from National Credit Solutions. Montanans seeking to find more information — including ways to check your credit report for free — should visit www.consumerprotection.mt.gov.
..."
http://www.doj.mt.gov/consumer/lawsuit/default.asp
"Movie Gallery Collections Lawsuit
Update:
Lawyers for the Montana Department of Justice, Office of Consumer Protection have been told that National Credit Solutions is withdrawing all negative credit reports filed against Montanans who owed late fees and other charges to Movie Gallery/Hollywood Video. Additionally, it is our understanding that National Credit Solutions will be sending letters to Montanans notifying them of the alleged debts owed to Movie Gallery/Hollywood Video and demanding payment of the debts. Please see below for more information.
More than 12,000 Montanans are facing fees and taking dings to their credit score because they owed late fees or other charges to the now-defunct Movie Gallery/Hollywood Video rental chain. Attorney General Steve Bullock filed a lawsuit (PDF) January 26 to stop the collections 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.
..."
It appears that Montana requires that debt collectors notify consumers prior to filing negative credit information. It would also appear that the NCS "collection fees" either might exceed Montana limits, or might not have been authorize by the original Hollywood Video/consumer contract.
They might be playing the same "collection fee" game with the BMG accounts as well, since they are playing the same "credit damage with no collection attempt" game.
It is also possible that Hollywood Video, having gone bankrupt a while back, may have failed to provide GLB notices now required by creditors who report to credit bureaus, and that NCS, since they routinely damage credit with no notice, may also have run afoul of similar regulations at the federal level.
http://www.uflp.com/images/hollywoodvideomoviegalleryagreedorder.pdf
In short, no collection agency collecting on Hollywood Video accounts may post the accounts to credit reports, nor may they threaten to do so.
Additional restrictions on other collection activity, including collection of many fees.
http://www.ripoffreport.com/Search/Takhar-Group.aspx
Note that the focus of their abusive collections activity is to threaten credit damage when consumers confront them over disputed, unrecognized "debts".
It is likely they have already trashed consumer credit reports just like NCS and NRA Group, since they are handling the same type of "negative option" book or music club accounts. They appear to have decided that it is more defensible to trash credit before a consumer might dispute.
Also note report of a deceptive and fraudulent Rodale Book Club website in connection with one such "debt".
File complaints with FTC, your state Attorney General, and at www.ic3.gov
If you find false damaging credit information on your credit reports, contact a consumer protection attorney immediately.
Federal FDCPA lawsuits:
http://dockets.justia.com/search?query=Takhar
These scam debt collectors apparently feel free to play "chicken" over your credit, even as they only guess at who to call and harass. Montana and Kansas AGs are on to NCS, and both NCS and NRA Group have had rising rates of federal lawsuits. One southern California attorney cost them around $20,000, probably for one of these piddling $100 "debts".
I wrote a letter to these places and sent it by certified mail.
I wrote a letter to BBB of my city and the city of the collection agency, The collection agency itself, Experian, Consumer Affairs of my hometown, and explain that this is not my debt and the collection agency did not give me anything in writing/ proof that this is my debt.
Try it, It worked for me.
Complaints on consumeraffairs.com were running over half due to these "errors" (really fabrications), with credit damage. The same pattern shows up whether the collection agency is NRA Group or NCS. NCS was caught by the Montana Attorney General pulling the same "credit damage" racket using accounts from bankrupt Hollywood Video.
If you know the "debt" is bogus, and they don't immediately remove their "error" when you dispute through the credit reporting agencies, file complaints with FTC and your state Attorney General, and contact a consumer attorney. Several have filed lawsuits against them, obtaining damages reported as high as $20K, even though the bogus "debt" may be only $50 to $150.
You might try www.naca.net
Debt collectors are required to send a letter within 5 days of their first contact, notifying you of your right to dispute and request verification of any alleged debt. Failure to send that letter is a violation of FDCPA, and you can sue them for it.
Send a letter disputing the debt and requesting that validation be obtained from the original creditor and sent to you. Mail it certified, return receipt requested. Include in your letter that it is inconvenient for you to communicate by phone at any time.
If they continue to harass you by phone, sue them for their violation of FDCPA.
If you send your dispute letter within 30 days of receiving their first letter, or if you have NEVER received any letter from them, then they must cease all collection activity until they obtain and send you proof you owe it. If they continue to collect, demanding payment by phone or letter, without sending you proof first, you can sue them for violating FDCPA.
Check your credit reports, as they often post damaging collection account information before any contact with consumers, even in cases where they are guessing who might owe some alleged debt. Dispute such credit information through the credit reporting agency, and if they verify erroneous information you can sue them for violations of FCRA. If they verify it before they have sent you proof in response to your dispute, you can sue them for violations of FDCPA.
These old BMG "debts" are often very old, even past the 7.5 year FCRA credit reporting limit, and if they still report them, they may be illegally reaging the original date of delinquency, another violation of FCRA (reporting false information) and FDCPA (deceptive collection).
They are often erroneous as well, sometimes due to fraud by the original creditor, who ran a shady "negative option" marketing operation, with many complaints of cramming unwanted product on customers. They are also often erroneously billing the wrong people, through sloppy skip-tracing, yet often also with negligent credit damaage.
You can either tolerate this cr*p, or you can sue them when you catch them, possibly costing them many times the $50 to $150 they are trying to get from you. One case a couple years against NRA cost them $20K.
A number of consumer attorneys are aware of what they are up to, particularly with the recent Montana AG action against NCS, also known for running a similar scam with old Hollywood Video accounts.
To find an attorney in your state, you might try www.naca.net
I found the number for NRA in Harrisburg, Pennsylvania. I talked a lady about the bill, so telephone or address for BMG. Mail the information to my address about the matter
The high level of consumer complaints of bogus "accounts" dunned to people never having any business with Columbia supports this.
This appears to be a fraudulent collection racket, that was originally played by select debt collectors working in concert with Columbia to gouge ex-customers, and that appears to be run in a similar manner by some of the same debt collectors using old account information sold off after Columbia/BMG shut down its music club business.
About a week after I sent the letters I recieved a phone call from Allied Interstate trying to collect the $44 for Columbia House. The guy was had an Indian accent. I expressed to him several times over the phone to mail me a letter of debt validation. His response was he didn't have to do so. I knew otherwise and said he did have to validate the date in writing and until I get that letter told him to have a nice day and hung up. I have yet to hear back from Allied Interstate and I have NEVER heard anything from Trident Asset Management (just the negative report on my credit report).
Hopefully I will get my updated CR with this debt removed...
You have taken the right action to protect your interests, disputing both with Trident, and with Experian to establish FCRA liability by Trident for posted errors if they fail to correct them.
If Allied Interstate is now collecting, then they have 5 days to send you a letter notifying you of the alleged debt, and you should also send them a letter disputing it.
Make sure you send all dispute letters to debt collectors within 30 days of receiving their first contact letters, to best protect your rights under FDCPA. Mail all letters certified, return receipt requested, so you have proof of your timely mailing, and of their receipt, should you need this in court.
By holding up a mortgage, they could become liable for the difference in interest rates on a refi, or for various nonrefundable costs if a refi or home purchase deal falls through, a lot more than $44.
Also note that Allied Interstate is subject to a settlement with FTC for abusive and harassing collection, including collection of unowed debts from the wrong people, and failing to validate. You should report your conversation with their Indian employee (who claims they don't have to validate) to FTC, as that indicates they have not learned anything, despite paying a $1.75 Million penalty.
If they don't remove their error, get an attorney. You might try www.naca.net
Side note before I continue: My wife has a CA trying to collect on a bogus Columbia House debt as well. It's a different CA and different amount.
With the holidays and him being ill, I have yet to contact him. I'm curious as to whether or not to contact him considering I have already sent letters to the CA and CB. Also would he know that the CA would could be liable for my morgage falling through and would he know what steps to do to go after the CA?