California's Identity Theft Act: a Tool to Protect Consumers After the Equifax Breach of 2017

• Publication year: 2017
• Author: Matthew M. Loker

California's Identity Theft Act: A Tool to Protect Consumers after the Equifax Breach of 2017

Matthew M. Loker

Matthew is a Partner with the Kazerouni Law Group, APC and is located in San Luis Obispo, California. In practice, 100% of the cases handled by the Kazerouni Law Group, APC are consumer-related, ranging from defending consumers that have been sued by creditors or debt collectors to large multi-district class actions. A majority of Matthew's practice focuses on the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Telephone Consumer Protection Act, California's Identity Theft Act, false advertising claims, and environmental actions, such as the Santa Barbara Oil Spill.

Every two seconds, a consumer falls victim to identity theft. In fact, the White House recently acknowledged that identity theft is the fastest growing crime in America, resulting in the loss of $16 billion from 12.7 million U.S. consumers in 2014 alone. The trend continues, given the September 2017 Equifax hack that exposed an estimated 143 million American consumers to further identity theft. The question becomes, what can we do as attorneys to protect our clients from debt collectors that insist upon collecting fraudulent accounts from victims of identity theft.

As merely one example to set the stage, "FC" hired live-in caregivers after FC's mother was diagnosed with a mental disability. Thereafter, one of the caregivers met a man online, who then moved into FC's mother's home. While living there, the man stole the mentally disabled woman's identity and utilized said identity to purchase multiple vehicles, open numerous credit cards, and obtain student loans despite not even being a student. When FC discovered these issues, FC expended hours upon hours attempting to close the accounts. Despite FC's pleas and compliance with all demands from the creditors, the creditors repeatedly said the mentally disabled woman was liable for the debts. After years of no success, FC was forced to retain the services of a law firm to force creditors to stop collecting the fraudulent debts from FC and to remove the debts from FC's credit report. Through contentious litigation, FC finally won in court and successfully closed each of the fraudulent accounts.

FC's victory was made possible, in part, by California's Identity Theft Act, California Civil Code section 1798.92 et seq. ("CITA"). This powerful statute forces creditors and debt collectors to investigate claims of fraudulent accounts upon receipt of written notice of the claims. Pursuant to CITA, "a person may bring an action against a claimant to establish that the person is a victim of identity theft in connection with claimant's claims against a person."¹ Prior to bringing an action, however, the aggrieved consumer must send a copy of a police report to the entity that is attempting to collect the fraudulent debt.² If, and only if, collection activity continues after the thirty-day period following the entity's receipt of the police report, the consumer is then entitled to bring a lawsuit.

The Intake

If you are going to represent a victim of identity theft, your initial intake of the consumer will be crucial in developing a strong case that will be ready for trial, or even one that can survive motion practice. Once you have all of the information listed below, at a minimum, you should assist your client in organizing the relevant documents and preparing an explicit dispute for all entities that have attempted to collect the fraudulent debts, including the credit bureaus. The more information and supporting documents, the better. Vague and/or flippant disputes provide entities with sturdy defenses during the course of litigation.

An important caveat to keep in mind during the intake process is that many consumers have learned that claims of identity theft will allow them to avoid legitimate debts. Discovery of such tactics rightfully makes businesses skeptical of any identify theft claims, to the detriment of the actual victims. A thorough intake process in conjunction with an objective analysis will help avoid the filing of lawsuits on behalf of fraudsters.

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Prior to seeking the documents listed below, you should have a detailed and thorough conversation with the consumer about the situation. What debt(s) are at...