S.B. No. 2902 aims to enhance protections for consumers who are victims of identity theft regarding the collection of debts incurred as a result of such theft. The bill introduces a new section, 392.308, to the Finance Code, which defines "identity theft" and outlines the conditions under which creditors, debt collectors, or third-party debt collectors are prohibited from attempting to collect debts from consumers who have been victimized. Specifically, if a consumer provides a court order declaring them a victim of identity theft or a Federal Trade Commission identity theft victim's report, the debt collection efforts must cease immediately. Additionally, the bill stipulates that the debt cannot be sold or transferred for collection from the victim, except in cases where the debt is pursued from the actual perpetrator of the identity theft.

The legislation also allows creditors and debt collectors to take legal action against consumers if they have a good faith belief that the consumer has misrepresented their status as a victim of identity theft. Furthermore, it grants creditors and debt collectors the right to pursue the alleged perpetrator of the identity theft for any debts incurred. This bill is set to take effect on September 1, 2025, providing a framework for protecting consumers from the repercussions of identity theft in the context of debt collection.

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