Identity Theft as a Defense to a Debt Lawsuit in Texas

Collin, Dallas, Denton, Grayson And Surrounding Areas

 

What to Do When You Are Sued for an Account You Never Opened, Used, or Authorized

Being sued for someone else’s debt is different from disputing the amount of a debt you recognize. In an identity-theft case, the core issue may be that the defendant never opened the account, never signed the application, never received the loan proceeds, or never authorized the transactions on which the plaintiff relies.

That can be a powerful defense, but it should be developed with evidence. A defendant should not simply tell the creditor “that is not mine” and assume the lawsuit will disappear. Identity-theft cases can require account-opening records, IP addresses, signatures, phone numbers, addresses, transaction locations, FTC reports, police reports, credit disputes, and other evidence showing that the real account activity does not match the defendant.

Texas law also provides specific identity-theft protections. Business & Commerce Code Chapter 521 allows a qualifying victim to seek a district-court order declaring the person a victim of identity theft. Texas Finance Code Section 392.308 creates important restrictions on collection of qualifying consumer debt after a creditor or collector receives such an order.

Ridgely Davis Law represents Texas consumers sued over fraudulent or misidentified accounts, including credit card debt, installment loans, private student loans, retail accounts, utility debt, apartment debt, and debt buyer lawsuits.

If the account is not yours, defend the lawsuit immediately. An identity-theft claim is far easier to litigate before a default judgment is entered than after one.

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What Counts as Identity Theft?

Texas Business & Commerce Code Section 521.051 prohibits obtaining, possessing, transferring, or using another person’s identifying information without consent and with intent to obtain goods, services, credit, or another thing of value.

Texas Penal Code Section 32.51 also criminalizes fraudulent use or possession of identifying information in specified circumstances.

The official Texas identity-theft civil statutes are available through the Texas Business & Commerce Code Chapter 521.

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Identity Theft Versus Mistaken Identity

Not every wrong-person lawsuit involves classic identity theft.

The plaintiff may have sued the wrong person because of:

• Similar names;
• Shared family names;
• Wrong Social Security digits;
• Old addresses;
• Mixed credit files;
• Data-entry errors;
• Incorrect assignment data;
• Father/son or mother/daughter name confusion;
• Business-name confusion; or
• Collector matching errors.

A mistaken-identity case can be just as defensible even if no criminal identity thief is identified.

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The Plaintiff Still Bears the Burden on Its Claim

The plaintiff must prove the debt claim against the defendant it sued.

Depending on the account, that may require evidence connecting the defendant to:

• The application;
• The contract;
• The account-opening process;
• The funds advanced;
• The purchases;
• The address;
• The phone number;
• The email address;
• The signature;
• Electronic authorization;
• Payment activity; and
• Account usage.

See Who Has the Burden of Proof in a Texas Debt Lawsuit?.

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Rule 93 and Denial of a Written Instrument

Identity-theft cases often involve an alleged signature or written contract.

Texas Rule of Civil Procedure 93 requires a verified denial when the defendant denies execution by the defendant or the defendant’s authority of a written instrument on which the plaintiff’s pleading is founded.

Failing to verify the denial can have serious evidentiary consequences because Rule 93 provides that absent the sworn plea, the written instrument can be received in evidence as fully proved.

See Filing an Answer.

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Immediate Steps After Discovering the Fraudulent Account

A defendant should consider taking several steps quickly:

• File a timely answer in the lawsuit;
• Preserve the citation and petition;
• Obtain the plaintiff’s account records;
• Create an FTC Identity Theft Report;
• Consider filing a police report;
• Review all three credit reports;
• Dispute fraudulent accounts with credit bureaus;
• Contact the original creditor’s fraud department;
• Freeze credit files if appropriate;
• Preserve address and employment records;
• Preserve phone and email records;
• Do not destroy old documents that may establish where you lived or worked; and
• Consider whether a Texas identity-theft court order is appropriate.

The Federal Trade Commission’s official IdentityTheft.gov site allows victims to report identity theft and obtain an FTC Identity Theft Report and recovery plan.

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What Evidence Can Prove the Account Is Not Yours?

Account-Opening Information

Applications may contain an address, phone number, email, employer, IP address, or bank account that does not belong to the defendant.

Signature Evidence

A handwritten or electronic signature may not match the defendant.

Geographic Evidence

Transactions may occur in locations inconsistent with where the defendant lived or worked.

Device and IP Information

Online loan and credit applications may generate device fingerprints, IP logs, email verification records, or telephone verification data.

Payment Source

Payments may come from accounts unrelated to the defendant.

Delivery Records

Merchandise may have been shipped to another address.

Credit Reports

Credit-file disputes can create a documented history of the fraud.

Police and FTC Reports

Contemporaneous reports can support credibility and create formal documentation.

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Discovery in an Identity Theft Lawsuit

Discovery can be critical because many of the most important records are controlled by the creditor.

The defense may seek:

• Original application;
• Electronic application data;
• IP address;
• Device ID;
• Telephone verification;
• Email verification;
• Identity-verification vendor records;
• Signature records;
• Shipping addresses;
• Purchase records;
• Payment-source records;
• Fraud investigation notes;
• Dispute correspondence;
• Call recordings;
• Account notes;
• Credit bureau dispute responses; and
• Assignment records.

See Discovery in Texas Debt Lawsuits.

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Texas Court Order Declaring a Person a Victim of Identity Theft

Texas Business & Commerce Code Section 521.101 allows a person injured by identity theft or who has filed a criminal complaint alleging fraudulent use of identifying information to apply to a district court for an order declaring the person a victim of identity theft.

Under Section 521.103, after notice and hearing, the court must enter the order if satisfied by a preponderance of the evidence that the applicant was injured by the qualifying identity-theft conduct.

The order can identify:

• The alleged violator where known;
• The identifying information misused;
• The affected account;
• The financial institution or merchant;
• Relevant account numbers;
• The amount involved; and
• The date of the fraudulent activity.

This can become powerful evidence when dealing with creditors and collectors.

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Texas Finance Code Section 392.308

Section 392.308 provides an important collection protection for qualifying consumer victims of identity theft.

When a creditor, debt collector, or third-party debt collector receives a qualifying court order under Business & Commerce Code Section 521.103 declaring the consumer a victim of identity theft, the statute generally prohibits collection of the consumer debt or portion of debt resulting from the identity theft.

The statute also requires specified corrective actions after receipt of qualifying notice.

The official statute is available through the Texas Finance Code Chapter 392.

Important limitation: Section 392.308 contains statutory exclusions, including certain home loans and collection of a judgment already obtained. That makes early action especially important.

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Why You Should Act Before Default Judgment

If an identity thief opened the account but the lawsuit is ignored, the plaintiff may obtain a default judgment against the innocent defendant.

Once judgment exists, the dispute becomes procedurally harder. The defendant may need to pursue:

• Motion for new trial;
• Vacating a default judgment;
• Restricted appeal;
• Bill of review;
• Garnishment defense;
• Settlement; or
• Other post-judgment relief.

Finance Code Section 392.308 also expressly excludes collection of a judgment already obtained from its specific protection, reinforcing the importance of defending before judgment.

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Credit Report Disputes

Identity theft commonly affects both litigation and credit reporting.

The FTC explains that consumers can use an FTC Identity Theft Report to help block identity-theft-related debts from appearing on credit reports and to support disputes with credit bureaus and furnishers.

Credit reporting should be addressed independently from the lawsuit. Winning or dismissing a lawsuit does not guarantee that every credit-report entry disappears automatically.

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Debt Buyers and Identity Theft

Debt buyers may have even less direct knowledge of how the original account was opened.

Discovery should examine:

• What identity data came with the portfolio;
• Whether the original application was transferred;
• Whether fraud disputes were included;
• Whether the debt buyer received notice of identity theft;
• What records connect the defendant to the account;
• Whether the seller retained fraud records; and
• Whether the assignment identifies the specific account.

See Debt Buyer Lawsuits.

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Identity Theft and Summary Judgment

A creditor may file summary judgment relying on statements and an affidavit while the defendant has evidence that the account was fraudulently opened.

The response should present competent evidence—not simply unsworn argument.

Potential evidence may include:

• Declaration;
• FTC report;
• Police report;
• Credit disputes;
• Address records;
• Employment records;
• Bank records;
• Signature evidence;
• Discovery admissions; and
• Creditor fraud records.

See Summary Judgment.

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What If Only Some Charges Were Fraudulent?

Identity theft does not always involve an entirely fraudulent account. A legitimate account can contain unauthorized charges.

The dispute then becomes transaction-specific:

• Which transactions were authorized?
• When was the card or account compromised?
• When was notice given?
• What investigation occurred?
• What credits were issued?
• What federal or contractual liability limits apply?

The defense should not overstate the position if part of the account is legitimate.

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How Ridgely Davis Law Approaches Identity-Theft Debt Cases

We build the defense from objective mismatches.

Our review may include:

• Account-opening data;
• Signature;
• Addresses;
• Phone numbers;
• Emails;
• IP addresses;
• Devices;
• Transaction locations;
• Shipping addresses;
• Payment sources;
• FTC report;
• Police report;
• Texas court-order options;
• Rule 93 verified denial;
• Credit disputes;
• Discovery strategy;
• Summary judgment; and
• Collection-law claims.

The objective is to show the court a coherent evidentiary story explaining why the plaintiff has connected the wrong person to the debt.

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1. What if I am sued for a debt that is not mine?

File a timely answer and begin collecting evidence showing that you did not open or authorize the account. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

2. Is saying “this is identity theft” enough?

No. Develop documentary evidence and use discovery to obtain the creditor’s account-opening records. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

3. Should I file an FTC report?

Yes, in a genuine identity-theft case an FTC Identity Theft Report can be useful for recovery, credit disputes, and litigation evidence. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

4. Should I file a police report?

It can be useful, particularly where significant fraud occurred or the creditor requests it. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

5. What is a Texas identity-theft court order?

Business & Commerce Code Chapter 521 allows qualifying victims to seek a district-court order declaring them victims of identity theft. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

6. What does Finance Code Section 392.308 do?

It creates specific restrictions on collection of qualifying consumer debt after receipt of a qualifying identity-theft order. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

7. Does Section 392.308 apply after judgment?

The statute expressly excludes collection of a judgment already obtained from its coverage. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

8. What if I never signed the contract?

Rule 93 may require a verified denial of execution if the plaintiff sues on a written instrument allegedly signed by you. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

9. Can I demand the application?

Discovery can seek the application and related electronic account-opening data. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

10. Can IP addresses help?

Yes. Online applications may contain IP, device, email, and telephone verification evidence. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

11. Can shipping records help?

Yes. Delivery to an unrelated address can support the defense. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

12. What if the account is mine but some charges are fraudulent?

The dispute may involve unauthorized transactions rather than identity of the entire account. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

13. Can identity theft appear on my credit report?

Yes. The FTC provides procedures for disputing and blocking identity-theft-related information. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

14. Can a debt buyer sue on a fraudulent account?

It can file suit, but it still must prove the claim and can be challenged with identity-theft evidence. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

15. What if I ignored the lawsuit and lost by default?

Post-judgment relief may still exist, but deadlines and procedures become more difficult. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

16. Can identity theft defeat summary judgment?

Potentially, if competent evidence creates a genuine dispute about whether the defendant incurred the debt. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

17. Should I freeze my credit?

It may be appropriate to prevent additional fraudulent accounts, particularly after confirmed identity theft. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

18. What records should I save?

FTC reports, police reports, credit reports, dispute letters, bank statements, addresses, employment records, and all lawsuit documents. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

19. Can I counterclaim against a collector?

Potentially, if collection conduct independently violates federal or Texas law. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

 

20. When should I contact Ridgely Davis Law?

Immediately after service when the debt is not yours or you suspect fraudulent account opening. Identity-theft defenses usually become stronger when the defendant preserves objective records such as account-opening data, addresses, device information, credit reports, bank records, and formal identity-theft documentation. Because written-instrument allegations can trigger verified-denial requirements in Texas, the answer and supporting evidence should be handled carefully.

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Continue Your Research

• Burden of Proof
• Debt Buyer Lawsuits
• Filing an Answer
• Discovery
• Summary Judgment
• Business Records Affidavits
• Fair Debt Collection Practices Act
• Texas Debt Collection Act