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Identity Theft Double Jeopardy under Civil & Criminal Law

Penal Code § 530.5 prohibits using the identity of another person for unlawful and fraudulent purposes.  The use may be in opening up a credit card line of credit (and then obtaining goods or services unlawfully) or in using the identity to obtain a driver’s license.  A violation of Penal Code § 530.5 is a wobbler, meaning it can be charged as a felony or a misdemeanor, depending upon the facts and the person’s criminal history.
Brief Synopsis: A person who commits identity theft is usually ordered to pay restitution to the victim, i.e., for a credit card bill created by the thief, but the thief is often unable to pay anything back and the victim is then hounded by the credit card company.  The CITA, discussed in this article, may offer some protection to the victim.
On the other side of equation is the victim of identity theft.  That person may receive a credit card bill for the items the identity thief obtained.  The judge may order that the thief pay the victim a certain amount in restitution, but the thief is often penniless, having sold the items to buy drugs, gifts for friends, etc.  The thief may even end up in prison, unable to pay back the victim.

The victim can file a claim with the credit card company, which some credit card companies will then fail to investigate, but continue asking the card owner to pay up or will refer the debt to a debt collector, who will telephone the card holder demanding payment.

If the credit card owner files a written claim with the credit card company, California’s Identity Theft Act (at Civil Code § 1798.92, et seq.), also known as CITA, forces creditors and debt collectors to investigate claims of fraudulent accounts.  If there is a conviction of someone else for such use, the credit card company should write off the debt.

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However, sometimes the credit card company will not do this. When this happens, the victim is often frustrated and angry. Under CITA, “a person may bring an action against a claimant to establish that the person is a victim of identity theft in connection with claimants claims against a person.”  Civil Code § 1798.93(a); Peters v. Discover Bank (9th Cir. 2016) 649 Fed. Appx. 405.

Before doing this, however, the victim must send a copy of the police report to the entity that is attempting to collect the fraudulent debt. Satey v. JP-Morgan Chase & Co. (9th Cir. 2008) 521 F.3d 1087, 1092, citing Cal. Civ. Code § 1798.93(a)(6)(A).  If, and only if, collection activity continues after the thirty-day period, the consumer may then bring a lawsuit.
The credit card companies can be tough on responding, as they have learned over time that many consumers will claim identity theft to avoid legitimate debts.  They may be skeptical, so if the thief was convicted, a copy of the docket report showing the conviction certainly helps.

Some credit card companies and debt collectors require an FTC Identity Theft Affidavit to substantiate identity theft claims.  To fill one out, go to https://www.identitytheft.gov/.  The credit card companies also usually require your driver’s license and social security card.  The credit card company will also want to see your signature to compare it to the credit card application.  Try to show the credit card company five or six authentic signatures from various documents you have signed.  Providing this will allow the collection agency to compare your signature with the one on the credit card application to detect a forgery.

If one is successful in suing the credit card company or collection agency(ies), one may recover attorneys’ fees, costs and an order that the debt be forgiven.  In addition, a consumer can also recover up to $30,000 in the form of a civil penalty against the claimant.  See Cutler ex rel. Jay v. Sallie Mae, Inc. 2015 LEXIS 58157 at 20 (C.D. Cal. 2015), citing Toroussian v. Asset Acceptance, LLC, 2013 U.S. Dist. LEXIS 145007, at 3 (C.D. Cal. 2013).

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