Relating to the collection of consumer debt incurred by certain individuals as a result of identity theft, the official text

H.B. No. 4238

AN ACT

relating to the collection of consumer debt incurred by certain

individuals as a result of identity theft.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 392, Finance Code, is

amended by adding Section 392.308 to read as follows:

Sec. 392.308. CONSUMER VICTIM OF IDENTITY THEFT. (a) In

this section, "identity theft" means:

(1) a violation of Section 521.051, Business &

Commerce Code, or a substantially similar federal law or law in

another state; or

(2) a criminal offense described by Section 32.51,

Penal Code, or a substantially similar federal law or law in another

state.

(b) This section does not apply to consumer debt that is a

home loan, as defined by Chapter 343, or to the collection of a

judgment already obtained.

(c) A creditor, debt collector, or third-party debt

collector that receives from a consumer a court order issued under

Section 521.103, Business & Commerce Code, or a substantially

similar federal law or law in another state, declaring the consumer

a victim of identity theft may not attempt to collect a consumer

debt or a portion of consumer debt that is a result of the identity

theft described by the court order.

(d) A creditor, debt collector, or third-party debt

collector who receives notice that a consumer debt is a result of

identity theft from a victim of identity theft in accordance with

Subsection (c):

(1) shall, not later than the seventh business day

after the creditor, debt collector, or third-party debt collector

receives the notice, cease efforts to collect the disputed debt or

disputed portion of the debt from the victim of identity theft;

(2) shall send to each person who has previously

received a report relating to that debt from the creditor, debt

collector, or third-party debt collector notice that the debt is

disputed under this section and not collectible from the victim of

identity theft;

(3) may not sell the debt or transfer it for

consideration, except to collect the debt from the alleged

perpetrator of identity theft or from a responsible person other

than the victim of identity theft; and

(4) may, if the disputed debt or disputed portion of

the debt is secured by tangible personal property, enforce the

security interest under Chapter 9, Business & Commerce Code, but

may not collect or seek to collect any deficiency from the victim of

identity theft.

(e) A creditor, debt collector, or third-party debt

collector has standing to bring and may bring an action to exercise

any right, seek any remedy, or use any lawful means to collect a

consumer debt or a portion of consumer debt that is disputed under

this section from an alleged perpetrator of identity theft who by

means of identity theft obtained, used, or possessed the money,

goods, services, or property of the consumer who is a victim of the

alleged perpetrator's identity theft.

SECTION 2. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 4238 was passed by the House on April

30, 2025, by the following vote: Yeas 135, Nays 0, 2 present, not

voting; and that the House concurred in Senate amendments to H.B.

No. 4238 on May 23, 2025, by the following vote: Yeas 135, Nays 0,

2 present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 4238 was passed by the Senate, with

amendments, on May 19, 2025, by the following vote: Yeas 31, Nays

0.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor