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This week, our Research Assistant Peer call sparked a lively discussion about identity theft, a topic that clearly resonates with our members. Recently, during an industry webinar, consumer litigation attorneys advised against pursuing consumers who claim identity theft, suggesting we should accept these claims at face value. They said to do otherwise would invite litigation, prompting several questions from the attendees on Monday’s call.

We explored whether this guidance applies to initial consumer claims of “this is not my debt,” or after documentation is provided by the consumer or their attorney. While it may be true that we aren’t equipped to fully investigate identity theft claims, we should be capable of conducting a reasonable investigation using the information provided by the consumer, data from our clients, prior communications, and practical judgment.

This issue is fundamentally about risk vs. reward. How much risk are we willing to accept? Consumers are protected by various federal and state laws to ensure they are not wrongfully held responsible for debts resulting from identity theft. No one in our industry aims to pursue true victims of identity theft; our goal is to identify and pursue the responsible parties. Shouldn’t we be allowed to request sufficient information to conduct a reasonable investigation? According to the Federal Trade Commission (FTC), we are. The FTC states, “If you’re not sure of the victim’s identity, the FCRA allows you to ask for proof of identity, such as a copy of government-issued identification. You also may ask for proof of a claim of identity theft, such as an Identity Theft Report issued by the FTC or a police report.” This guidance supports the need for reasonable investigation.

Additionally, if a consumer provides multiple forms of documentation indicating they are a victim, it is likely best to consider them a true victim of identity theft, even in the absence of other documentation.

Understanding your risk tolerance begins with conducting a risk assessment. Once this is complete, the next steps involve creating or updating your policy and procedures, followed by training your staff on how to handle identity theft claims and implementing a plan of action for these accounts. It is crucial to provide specialized training for those conducting reasonable investigations, so they know what to look for and how to document their findings. Regular audits of your processes are essential to ensure they are effective and up to date.

Having robust policies and procedures for handling identity theft claims will help prevent pursuing the wrong parties, keep you out of court over potentially losing cases, save your staff time, and protect your company’s reputation.

Documents and Crowdsourced Materials: 

• Understanding the Consumer Spending Split and How to Recover More Across the Divide
• Congress Struggling with Post-Chevron World
• Missouri Federal Court Dismisses FDCPA Claim Over Letters Sent to Plaintiffs’ Attorney

Top Reads:

• Member Questions: SOLs, Call Auditing, ID Theft, and More!

Upcoming Webinars/ Other Announcements: 

• Important Announcement: All AI Notetaking Bots will be removed from Research Assistant Peer Group Meetings. This is to maintain the confidentiality of our peer members.

• Have topics you want to discuss during the peer call? Please send them to: Sara_Consultant@roundtables.us by Thursday to ensure it makes it on our agenda!