A Refresher on Working with Debts Related to Identity Theft

laptopACA International members should review FTC identity theft reports that consumers may submit during account resolution, and remember that, in most cases, a police report is not required.

02/16/2022 10:15 A.M.

2 minute read

A new California law requires a debt collector to cease collection activities until it completes a review of a Federal Trade Commission identity theft report and a written statement from the consumer, if received.

A.B. 430 authorizes a consumer to choose to send a copy of a police report documenting the identity theft but prohibits a debt collector from also requiring a police report if the debtor submits an FTC identity theft report.

Passage of the law serves as a reminder for ACA International members to review  FTC identity theft reports that consumers may submit during account resolution.

When the reports were released for consumers on IdentityTheft.gov, the FTC stated that “[c]redit agencies, banks, and merchants should treat the FTC Identity Theft Report like a police report. It’s a report to a federal law enforcement agency, and subject to laws that impose criminal penalties for knowingly making false statements to the government.

Additionally, according to a 2017 blog post from the FTC, at that time the commission eliminated the need for a consumer to submit a police report in most cases when reporting and recovering from identity theft.

ACA’s Take
From a compliance perspective, if a consumer directly provides a debt collector with an FTC identity theft report, the debt collector furnishing data to a consumer reporting agency needs to ensure at a minimum that it has marked the account as disputed. And, under A.B. 430 for agencies licensed in California, it must not additionally request a police report.

Here, ACA provides a redacted version of an FTC identity theft report from a consumer that members will find helpful to review.

For more information, ACA’s financial literacy website Know My Debt is a resource your collectors can share with consumers and feel confident the information is correct and helpful.

Know My Debt delivers tips and clearly worded explanations aimed at helping consumers improve their financial literacy and resolve their debts.

How to Add Know My Debt to Your Website

  1. On your website, create a link on your consumer resource page called Know My Debt: Explaining Consumer Rights and Navigating Debt Solutions.
  2. Use this address for the hyperlink: https://www.knowmydebt.com.
  3. Be sure to remove existing references and hyperlinks to the former Ask Doctor Debt website (http://www.askdoctordebt.com).

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