89R13500 MLH-F

By: Meyer H.B. No. 4238

A BILL TO BE ENTITLED

AN ACT

relating to the collection of consumer debt incurred by certain individuals as a result of identity theft.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 392, Finance Code, is amended by adding Section 392.308 to read as follows:

Sec. 392.308. CONSUMER VICTIM OF IDENTITY THEFT. (a) In this section, "identity theft" means:

(1) a violation of Section 521.051, Business & Commerce Code, or a substantially similar federal law or law in another state; or

(2) a criminal offense described by Section 32.51, Penal Code, or a substantially similar federal law or law in another state.

(b) This section does not apply to consumer debt that is a home loan, as defined by Chapter 343, or to the collection of a judgment already obtained.

(c) A creditor, debt collector, or third-party debt collector may not attempt to collect a consumer debt or a portion of a consumer debt from a consumer if the consumer provides:

(1) a criminal complaint alleging the commission of an offense under Section 32.51, Penal Code, or a substantially similar federal law or law in another state, for which the consumer was a victim, accompanied by a statement identifying the consumer debt or the portion of consumer debt that resulted from the offense;

(2) a court order issued under Section 521.103, Business & Commerce Code, or a substantially similar federal law or law in another state, declaring the consumer a victim of identity theft; or

(3) a copy of a Federal Trade Commission identity theft victim's report, completed, signed, and filed by the consumer:

(A) affirming that the consumer is a victim of identity theft; and

(B) identifying the consumer debt or affected portion of the consumer debt incurred as a result of identity theft.

(d) A creditor, debt collector, or third-party debt collector who receives notice that a consumer debt is a result of identity theft from a victim of identity theft in accordance with Subsection (c):

(1) shall immediately cease efforts to collect the disputed debt or disputed portion of the debt from the victim of identity theft;

(2) shall send to each person who has previously received a report relating to that debt from the creditor, debt collector, or third-party debt collector notice that the debt is disputed under this section and not collectible from the victim of identity theft;

(3) may not sell the debt or transfer it for consideration, except to collect the debt from the alleged perpetrator of identity theft or from a responsible person other than the victim of identity theft; and

(4) may, if the disputed debt or disputed portion of the debt is secured by tangible personal property, enforce the security interest under Chapter 9, Business & Commerce Code, but may not collect or seek to collect any deficiency from the victim of identity theft.

(e) If a creditor, debt collector, or third-party debt collector has a good faith reason to believe that a consumer has disputed a consumer debt or portion of a consumer debt under this section based on a material misrepresentation that the consumer is a victim of identity theft, the creditor, debt collector, or third-party debt collector may file suit in a court of competent jurisdiction to collect the debt from the consumer.

(f) In a suit under Subsection (e), the creditor, debt collector, or third-party debt collector must show by a preponderance of the evidence that the consumer is not a victim of identity theft.

(g) A creditor, debt collector, or third-party debt collector has standing to bring and may bring an action to exercise any right, seek any remedy, or use any lawful means to collect a consumer debt or a portion of consumer debt that is disputed under this section from an alleged perpetrator of identity theft who by means of identity theft obtained, used, or possessed the money, goods, services, or property of the consumer who is a victim of the alleged perpetrator's identity theft.

SECTION 2. This Act takes effect September 1, 2025.