More than three million people are being harassed over debts of dubious origin from the defunct video rental chains Hollywood Video and Movie Gallery.

When these chains went bust, their collection records were apparently in complete disarray. The collection agency that has been attempting to track down alleged debtors has been using all sorts of unsavory tactics in the process. So much so that their actions led to a recent settlement where the collection agencies were supposed to agree to stop all the harassment.

Under the terms of the settlement, the collection agency is now required to have solid proof that you owe what they say you owe. But unfortunately, that has not stopped them. So when you are harassed about an alleged Hollywood Video or Movie Gallery debt, require them to show you verifiable proof of that debt.

If you receive a call from a collection agency, they are by law supposed to send a letter about the debt in five business days. Many don't comply with this requirement. But if they do and you don't want to be harassed anymore, send them a drop dead letter in return.

In the letter, you'll want to dispute the validity of the debt and tell them not to contact you any further because, under the Fair Debt Collection Practices Act, you are telling them to stop.

If a legitimate debt is still within statute, a drop dead letter does not eliminate the possibility of you being sued against that debt, but it should stop the phone calls if you're dealing with a law-abiding collector.

The other thing about this recent Hollywood Video and Movie Gallery settlement is they are prohibited from putting anything about the alleged debt on your credit report. So if something shows up, you start challenging it with the credit bureau. Just Google or Bing 'Hollywood Video settlement + (your state's name)' so you can print out info and send it to the credit bureau.

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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