What is the Texas Identify Theft Enforcement and Protection Act?
The Identity Theft Enforcement and Protection Act (the "Act") went into law in 2007 and can be found as chapter 521 of the Business and Commerce Code.
Simply put, the Act makes a person whose identifying information is used by any unauthorized person a victim who is entitled to certain rights and relief. The Act, however, excludes use by certain financial institutions and insurance companies.
The Act defines broadly the information that is to be protected, but is commonly used to steal a person's identity. This information includes, in combination, a person's name, Social Security Number, date of birth, government-issued identifiation number, mother's maiden name, and biometric data (fingerprint, voice samples and retinal imaging). Additionally, information about a person's physical or mental health and credit/debit card numbers is subject to protection.
Who is Subject to the Act?
The Texas Legislature makes it a violation for any person not excluded under the Act from using the personal information to obtain goods, services, credit or "any other thing of value" in another person's name. Although quite broad, there are some exceptions, which include financial institutions, insurance companies, and certain persons covered under the Fair Credit Reporting Act. If you have concerns about legitimate businesses using protected information in an improper way, further investigation about that entity and whether it meets the exception requirements is needed.
The Act also requires legitimate businesses to implement and maintain procedures for protecting confidential information of its customers from disclosure. As defined, businesses subject to the Act do not include certain financial institutions (which are presumably covered by federal privacy laws). However, nonprofit sports clubs are covered. So, youth sports organizers needs to be aware of the law as well.
What Businesses Need to Do?
In the event that protected information is compromised, businesses need to let consumers know that their information may have been compromised. Depending on the number of persons effected, notice may be provided in writing, by electronic means (e-mail), posting on the merchant's website, or broadcast over major statewide media.
How Can Victims of Identity Theft Can Use the Act?
If a person has their protected, confidential information used to obtain goods, services or other things of value AND is injured, then they may file an application in court seeking a declaration that they were the victim of identity theft. A person may also make an application if they have filed a police report in which they claim to be a victim under section 32.51 of the Texas Penal Code (fraudulent use or possession of identifying information).
Filing an application more than likely requires the assistance of an attorney. By statute, an application must be made in district court. If a person wants to file in a county court at law, they should check the Government Code provisions conferring jurisdiction on the specific county court. Many large counties provide concurrent jurisdiction between county and district court. However, this is not true for an application made under this statute. If you are involved in debt dispute, keep in mind that a separate lawsuit may be needed.
When to Use the Act?
If you are a consumer that has been sued by a creditor and the claim is for goods and services that you did not seek or receive, then you may want to obtain a declaration as part of the pending lawsuit. A victim must look out for their best interests, and that includes correcting any incorrect credit reports resulting from collection actions against a victim of identity theft. Consumers must be their own advocate.
If a consumer sees that several accounts were opened without their authority, a single lawsuit may permit them to obtain a court order as to each of the improper accounts. An application must be made within four years of when you knew of should have known that you were the victim of identity theft. So, monitor your credit report with some regularity. A person is likely to be more successful with an application if they make it sooner than later because they would have the ability to more easily obtain records from third-party merchants.
Any court order declaring a person to be a victim of identity theft can and should be shared with credit reporting agencies by the victim. Not only can this help preserve or repair a bad credit history, it can help a person obtain and/or maintain employment. Remember, employers can and frequently look at a job applicant's credit history in making employment offers. If you are a victim of identity theft, having an order from a district court that your identity was stolen provides a much better explanation of spotty credit report than an unsubstantiated claim.
Unlike other lawsuits where a defendant is almost always named, a delcaration can be obtained without proving who stole your identity. If you can establish the identity of the perpetrator and serve them, you may also obtain a money judgment of between $2,000 and $50,000 for violations of the statute. The statute is also a tie-in statute to the Deceptive Trade Practice Act, which is a powerful tool for exploited consumers.
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