NJ Bill Protects ID Theft Victims from Debt Collectors

August 17, 2015 · by rosenblumlawfirm · in

id theft

Identify theft is expected to soon surpass traditional theft as the leading form of property crime in the United States. 7.5 percent of households reported some type of identity theft in 2014 and there have been numerous recent stories of attempts to hack into major retailers to steal credit card numbers by the thousands. Some of the most high-profile breaches have included Target, Home Depot, and TJ Maxx. Unfortunately, in many cases, the perpetrators of these crimes are not caught and the victims are hounded for payment from debt collectors.

The New Jersey Senate recently approved a bill to protect victims of identity theft from being further victimized. The S-1344 bill, sponsored by New Jersey Senator Jeff Van Drew, would establish a process to halt debt collection. Under this new legislation, once an identity or credit card theft victim makes the debt collector aware of their victim status, debt collection activities must cease until it is determined that the consumer is actually responsible for the debt.

“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. Van Drew. “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.

Under the new legislation, a victim of identity theft could demonstrate that they are not responsible for the debt by providing a copy of a standardized affidavit of identity theft, as established by the Federal Trade Commission (FTC), as well as a written statement certifying that the representations are “true, correct and contain no material omissions of fact to the best knowledge of the consumer.”

Once the required paperwork is submitted, the debt collector would review all the information provided to make a good faith determination of whether the data establishes that the consumer is not responsible for the specific debt. The debt collector must then notify the consumer in writing of their decision.

If the bill passes, the courts will be able to impose civil penalties of between $500 to $1,000 per violation of the law. The legislation was approved by the Senate Commerce Committee in late July and the next step will be a vote in the full Upper House.

The bill is particularly relevant in light of another recent case of identity theft via a retail store data breach. Federal authorities charged Angel Angulo, 25, and Crystal Banuelos, 28, with aggravated identity theft and conspiracy to commit bank fraud for stealing 94,000 debit and credit cards from Michaels’ customers. The breach occurred at 80 stores across 19 states, including New Jersey.

The two men installed wireless counterfeit devices on the electronic cash registers at Michaels to acquire customers’ bank account and PINs. Thestolen account information was used to produce counterfeit bank cards to withdraw funds from the compromised bank accounts. Angulo and Banuelos reportedly stole more than $420,000 from financial institutions and, if convicted, face up to 30 years in prison and a $1 million fine.

Right now, debt collectors are able to harass and intimidate the victims of Angulo’s and Banuelos’s crime, but if the new legislature passes New Jersey residents will have a recourse to stop the calls and other collection attempts.