Bill Would Protect Victims of ID Theft, Data Breaches
As computer breaches at major banks and retailers increase with alarming frequency, one New Jersey legislator is seeking to create a law stating that if you're a victim of identity theft and you can legally verify your information, collection agencies would be forced to stop hounding you to pay debts you do not owe.
Computer breaches and identity theft have almost doubled since 2010.
"Right now, some collection agencies are still trying to get money from someone even when they have been informed that they are indeed not the individual from whom they should be collecting the debt," said NJ Sen. Jeff Van Drew (D-Cape May Court House). "It's bad enough to have your ID stolen, but to then have a credit agency say you have to pay this or else that's going to be another strike against you is terrible."
A bill (S-1344) sponsored by Van Drew would create a process for a victim of identity theft to notify a debt collector of their status as a victim. It would also require the debt collector to stop collection activities until a determination is made by the collector as to whether the consumer is in fact responsible for the debt in question.
"If you are a victim of identity theft, you should have the opportunity to prove that you are not the right individual, that they indeed have made a mistake," Van Drew explained.
In order for an identity theft victim to prove they do not owe a debt they would be required to provide:
- A properly completed copy of a standardized affidavit of identity theft, as established by the Federal Trade Commission.
- A written statement certifying that the representations are true, correct and contain no material omissions of fact to the best knowledge and belief of the consumer.
Once the paperwork is submitted, the debt collector would have to review and consider all of the information provided and any other information available from the any other credible source, and determine, in good faith, whether the information establishes that the consumer is not responsible for the specific debt in question. The debt collector must then notify the consumer in writing of that determination and the basis for it.
"Currently people have proven to debt collectors that they're not responsible for a debt and they don't care and then the next week the identity theft victim gets another call demanding payment," the assemblyman said.
If the bill becomes law, a court would have the power impose a civil penalty of not less than $500 or more than $1,000 for each violation of the act. The legislation does give debt collectors an opportunity to cure a violation within 15 days in certain circumstances.
Monday, the State Senate Commerce Committee approved the bill. The next step would be a vote in the full Upper House. Identical legislation is sponsored in the assembly by Assemblyman Bob Andrezejczak (D-Cape May Court House).
According to the website www.statisticbrain.com:
- 12,157,400 is the average number of identity theft victims annually;
- 7.5 percent of U.S households reported some type of identity fraud in 2014;
- $5,130 is the average financial loss per identity theft incident;
- $26,350,000,000 was the total financial loss attributed to identity theft in 2014; and
- $13,200,000,000 was the total financial loss attributed to identity theft in 2010.