New Texas Law, First in Nation, Helps Victims of Coerced Debt Access Identity Theft Protections

Texas State Senator Judith Zaffirini and State Representative Morgan Meyer spearheaded the effort this session to pass HB 2697. This new law, which goes into effect September 1, is an important step forward to combat coerced debt and help survivors of domestic violence and financial abuse achieve economic stability.

Coerced debt is debt incurred by an abuser in the name of a victim of domestic violence or financial abuse. It affects as many as one in three Texans who reach out to the National Domestic Violence Hotline. Now, Texans like Sherry, a Corpus Christi mother of two, have legal recourse options. After 10 years in an abusive relationship, she was able to leave the abuse, but found herself stuck with substantial debt that her abuser had taken out in her name.

The new law amends the definition of identity theft in Texas to clearly include debts an abuser compelled a victim to take out through force or threat. The law also covers fraud, when an abuser uses a victim’s identity unbeknownst to that person. This law broadly applies to any abusive relationship.

This clarification of state law will bring newfound relief for survivors of domestic violence who are working to rebuild their lives. It will help to free credit scores and debt obligations from the damage created by past abusers, increasing access to better jobs, housing and lower-cost loans.

Starting on September 1, 2019, victims of coerced debt will be able to obtain a police report alleging identity theft. A police report triggers access to important identity theft protections in state and federal law. With a police report, victims will be able to:

• Block information resulting from identity theft on a credit report;
• Access unauthorized use protections for credit card debts;
• Challenge more recent charges as billing errors if the charges are made by an abuser without benefitting the victim;
• File an application in state district court to be declared a victim of identity theft for specified debts; and
• Assert identity theft as a defense in debt claim cases and other legal action related to coerced debt.

This clarification of the definition of identity theft, while small, will have outsized impact on the ability of coerced debt victims to achieve financial stability and well-being. It also sets Texas apart as a national leader, making it the first state to take this important step to address the problem of coerced debt.

For more on coerced debt, see Texas Appleseed’s white paper, Abuse by Credit, and watch for our new toolkit for victims of coerced debt, forthcoming late summer 2019.