Amended in Senate August 2, 2016

Amended in Senate May 31, 2016

Amended in Assembly March 28, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1723

Introduced by Assembly Member Dodd

(Coauthors: Assembly Members Brough, Chávez, Lackey, Maienschein, Mullin, and Waldron)

(Coauthor: Senator Hertzberg)

January 28, 2016

An act to amend begin delete Section end delete begin insert Sections 1785.16.2 and end insert 1788.18 of the Civil Code, relating to debt collection.

LEGISLATIVE COUNSEL’S DIGEST

AB 1723, as amended, Dodd. Debt collection.

Existing law requires a debt collector that receives a copy of a police report filed by the debtor alleging that the debtor is the victim of an identity theft crime and a written statement in which the debtor claims to be the victim of identity theft to cease collection activities until completion of a review. Existing law requires the debt collector to review and consider all of the information provided by the debtor and other available information and authorizes the debt collector to recommence debt collection activities only upon making a good faith determination that the information does not establish that the debtor is not responsible for the specific debt in question.

This bill, the Identity Theft Resolution Act, would require the debt collector, upon receipt of the police report and written statement described above, if it furnished adverse information about the debtor to a consumer credit reporting agency, to notify the consumer credit reporting agency that the account is disputed, and initiate a review, as specified, within 10 business days. The bill would require the debt collector to send notice of its determination to the debtor no later than 10 business days after concluding the review. The bill would require a debt collector that does not recommence collection activities under these provisions to notify the creditor, no later than 10 business days after making its determination, and if it furnished adverse information to a consumer credit reporting agency, to notify the agency to delete that information no later than 10 business days after making its determination. The bill would also prohibit a creditor from begin delete pursuing further collections against the consumer on the debt or selling the debt, end delete begin insert selling a consumer debt to a debt collector end insert if the creditor has received notice that the debt collector has terminated debt collection activities, as described above.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

This act shall be known, and may be cited, as
the Identity Theft Resolution Act.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 1785.16.2 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

1785.16.2.  

(a) No creditor may sell a consumer debt to a debt
collector, as defined in 15 U.S.C. Sec. 1692a, if the consumer is
a victim of identity theft, as defined in Section 1798.2, and with
respect to that debt, the creditor has received notice pursuant to
subdivision (k) of Section begin delete 1785.16. end delete begin insert 1758.16 or paragraph (2) of
subdivision (g) of Section 1788.18. end insert

(b) Subdivision (a) does not apply to a creditor’s sale of a debt
to a subsidiary or affiliate of the creditor, if, with respect to that
debt, the subsidiary or affiliate does not take any action to collect
the debt.

(c) For the purposes of this section, the requirement in 15 U.S.C.
Sec. 1692a, that a person must use an instrumentality of interstate
commerce or the mails in the collection of any debt to be
considered a debt collector, does not apply.

begin delete SEC. 2. end delete

begin insert SEC. 3. end insert   

Section 1788.18 of the Civil Code is amended to read:

1788.18.  

(a) Upon receipt from a debtor of all of the following,
a debt collector shall cease collection activities until completion
of the review provided in subdivision (d):

(1) A copy of a police report filed by the debtor alleging that
the debtor is the victim of an identity theft crime, including, but
not limited to, a violation of Section 530.5 of the Penal Code, for
the specific debt being collected by the debt collector.

(2) The debtor’s written statement that the debtor claims to be
the victim of identity theft with respect to the specific debt being
collected by the debt collector.

(b) The written statement described in paragraph (2) of
subdivision (a) shall consist of any of the following:

(1) A Federal Trade Commission’s Affidavit of Identity Theft.

(2) A written statement that contains the content of the Identity
Theft Victim’s Fraudulent Account Information Request offered
to the public by the California Office of Privacy Protection.

(3) A written statement that certifies that the representations are
true, correct, and contain no material omissions of fact to the best
knowledge and belief of the person submitting the certification.
A person submitting the certification who declares as true any
material matter pursuant to this subdivision that he or she knows
to be false is guilty of a misdemeanor. The statement shall contain
or be accompanied by the following, to the extent that an item
listed below is relevant to the debtor’s allegation of identity theft
with respect to the debt in question:

(A) A statement that the debtor is a victim of identity theft.

(B) A copy of the debtor’s driver’s license or identification card,
as issued by the state.

(C) Any other identification document that supports the
statement of identity theft.

(D) Specific facts supporting the claim of identity theft, if
available.

(E) Any explanation showing that the debtor did not incur the
debt.

(F) Any available correspondence disputing the debt after
transaction information has been provided to the debtor.

(G) Documentation of the residence of the debtor at the time of
the alleged debt. This may include copies of bills and statements,
such as utility bills, tax statements, or other statements from
businesses sent to the debtor, showing that the debtor lived at
another residence at the time the debt was incurred.

(H) A telephone number for contacting the debtor concerning
any additional information or questions, or direction that further
communications to the debtor be in writing only, with the mailing
address specified in the statement.

(I) To the extent the debtor has information concerning who
may have incurred the debt, the identification of any person whom
the debtor believes is responsible.

(J) An express statement that the debtor did not authorize the
use of the debtor’s name or personal information for incurring the
debt.

(K) The certification required pursuant to this paragraph shall
be sufficient if it is in substantially the following form:

 

“I certify the representations made are true, correct, and contain no material omissions of fact.

(Date and Place)  (Signature) ”

 

(c) If a debtor notifies a debt collector orally that he or she is a
victim of identity theft, the debt collector shall notify the debtor,
orally or in writing, that the debtor’s claim must be in writing. If
a debtor notifies a debt collector in writing that he or she is a victim
of identity theft, but omits information required pursuant to
subdivision (a) or, if applicable, the certification required pursuant
to paragraph (3) of subdivision (b), if the debt collector does not
cease collection activities, the debt collector shall provide written
notice to the debtor of the additional information that is required,
or the certification required pursuant to paragraph (3) of
subdivision (b), as applicable, or send the debtor a copy of the
Federal Trade Commission’s Affidavit of Identity Theft form.

(d) Within 10 business days of receiving the complete statement
and information described in subdivision (a), the debt collector
shall, if it furnished adverse information about the debtor to a
consumer credit reporting agency, notify the consumer credit
reporting agency that the account is disputed, and initiate a review
considering all of the information provided by the debtor and other
information available to the debt collector in its file or from the
creditor. The debt collector shall send notice of its determination
to the debtor no later than 10 business days after concluding the
review. The debt collector may recommence debt collection
activities only upon making a good faith determination that the
information does not establish that the debtor is not responsible
for the specific debt in question. The debt collector’s determination
shall be made in a manner consistent with the provisions of
subsection (1) of Section 1692 of Title 15 of the United States
Code, as incorporated by Section 1788.17 of this code. The debt
collector shall notify the debtor in writing of that determination
and the basis for that determination before proceeding with any
further collection activities. The debt collector’s determination
shall be based on all of the information provided by the debtor and
other information available to the debt collector in its file or from
the creditor.

(e) No inference or presumption that the debt is valid or invalid,
or that the debtor is liable or not liable for the debt, shall arise if
the debt collector decides after the review described in subdivision
(d) to cease or recommence the debt collection activities. The
exercise or nonexercise of rights under this section is not a waiver
of any other right or defense of the debtor or debt collector.

(f) The statement and supporting documents that comply with
subdivision (a) may also satisfy, to the extent those documents
meet the requirements of, the notice requirement of paragraph (5)
of subdivision (c) of Section 1798.93.

(g) A debt collector who ceases collection activities under this
section and does not recommence those collection activities shall
do all of the following:

(1) If the debt collector has furnished adverse information to a
consumer credit reporting agency, notify the agency to delete that
information no later than 10 business days after making its
determination.

(2) Notify the creditor no later than 10 business days after
making its determination that debt collection activities have been
terminated based upon the debtor’s claim of identity theft.

begin delete

(h) Upon receipt of the notification described in paragraph (2)
of subdivision (g), the creditor shall not pursue further collections
against the consumer on, or sell, the debt.

end delete begin delete

(i)

end delete

begin insert (h) end insert  A debt collector who has possession of documents that the
debtor is entitled to request from a creditor pursuant to Section
530.8 of the Penal Code is authorized to provide those documents
to the debtor.

begin delete

(j)

end delete

begin insert (i) end insert  Notwithstanding subdivision (h) of Section 1788.2, for the
purposes of this section, “debtor” means a natural person, firm,
association, organization, partnership, business trust, company,
corporation, or limited liability company from which a debt
collector seeks to collect a debt that is due and owing or alleged
to be due and owing from the person or entity. The remedies
provided by this title shall apply equally to violations of this
section.