Bill > HB4238

This bill adds a new section to the Texas Finance Code that provides protections for consumers who are victims of identity theft when attempting to collect consumer debt. The bill defines identity theft as either a violation of state business and commerce code or a specific criminal offense under the penal code. It requires creditors, debt collectors, and third-party debt collectors to cease collection efforts on a debt or portion of a debt when presented with a court order declaring the consumer a victim of identity theft. Upon receiving such notice, these entities must stop collection attempts within seven business days, notify other parties who have received reports about the debt that it is disputed, and refrain from selling or transferring the debt except to pursue collection from the alleged identity theft perpetrator. The bill allows creditors to enforce security interests on the debt but prohibits them from seeking deficiency payments from the identity theft victim. Additionally, creditors and debt collectors retain the right to pursue legal action to collect the debt from the alleged perpetrator of the identity theft. The bill does not apply to home loans or judgments already obtained, and it is set to take effect on September 1, 2025.

Business and Industry, Labor and Employment

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4238