Furnisher Direct Dispute and Identity Theft Block Request - Texas

FURNISHER DIRECT DISPUTE AND IDENTITY THEFT BLOCK REQUEST

State of Texas

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

Date: [__/__/____]

From (Consumer/Consumer's Attorney):

Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Date of Birth: [__/__/____]
Last Four Digits of SSN: [____]
Telephone: [________________________________]
Email: [________________________________]
Texas State Bar No. (if attorney): [________________________________]

To (Furnisher of Information):

Company Name: [________________________________]
Dispute Department / Compliance Department: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]

Re: Direct Dispute Under 15 U.S.C. § 1681s-2(a)(8) and Identity Theft Block Under 15 U.S.C. § 1681c-2 and Texas Bus. & Com. Code Ch. 521
Account Number: [________________________________]
Type of Account: [________________________________]
Consumer Reporting Agencies Affected: ☐ Equifax ☐ Experian ☐ TransUnion ☐ Other: [____]

PART 1: DIRECT DISPUTE TO FURNISHER

Section 1.1: Legal Basis for Direct Dispute

This letter constitutes a formal direct dispute of the information you are furnishing to consumer reporting agencies regarding the above-referenced account. This dispute is made pursuant to:

• Federal: 15 U.S.C. § 1681s-2(a)(8) and 12 C.F.R. Part 1022, Subpart E
• Texas: Tex. Fin. Code Ch. 392 (TDCA) and Tex. Bus. & Com. Code Ch. 17 (DTPA) via the tie-in provision at Tex. Fin. Code § 392.101

Your Obligations Upon Receipt of This Dispute

Under 15 U.S.C. § 1681s-2(a)(8) and 12 C.F.R. § 1022.43, upon receipt of this direct dispute, you must:

1. Conduct a reasonable investigation within 30 days of receipt (extendable by 15 days if the consumer provides additional relevant information);
2. Review all relevant information provided by the consumer;
3. Report the results of the investigation to the consumer;
4. If the information is inaccurate, incomplete, or unverifiable, correct, delete, or modify the information and notify each CRA;
5. If you determine the dispute is frivolous or irrelevant, notify the consumer within 5 business days with the reasons and identify information needed to investigate.

Texas-Specific Obligations

If you are a third-party debt collector subject to the Texas Debt Collection Act (Tex. Fin. Code Ch. 392), misrepresenting the character, extent, or amount of a consumer debt constitutes a violation of Tex. Fin. Code § 392.304(a)(8). Because TDCA violations are automatically DTPA violations under Tex. Fin. Code § 392.101, furnishing inaccurate information with knowledge of its inaccuracy may subject you to treble damages under the DTPA.

IMPORTANT: You may NOT refuse to investigate this dispute on the grounds that it was submitted directly to you rather than through a CRA. The direct dispute right under § 1681s-2(a)(8) is separate from the CRA-mediated dispute process.

Section 1.2: Account Information Being Disputed

Account Number: [________________________________]
Name of Account Holder (as reported): [________________________________]
Type of Account: [________________________________]
Current Reported Balance: $[________________________________]
Date Opened (as reported): [__/__/____]
Date of Last Activity (as reported): [__/__/____]
Current Status (as reported): [________________________________]

Specific Items Being Disputed

☐ The account does not belong to me
☐ The reported balance is incorrect
☐ The reported payment history is inaccurate
☐ The account status is incorrect (e.g., reported as open when closed, reported as delinquent when current)
☐ The reported date of first delinquency is incorrect
☐ The account has been paid in full but is not reported as such
☐ The account has been settled but is not reported as settled
☐ The account was included in a bankruptcy discharge but is still being reported
☐ The reported credit limit is incorrect
☐ The account is being reported past the 7-year reporting period under 15 U.S.C. § 1681c(a)
☐ Unauthorized charges are included in the reported balance
☐ The account resulted from identity theft
☐ Other: [________________________________]

Detailed Explanation of Dispute

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

Correct Information (if known)

The correct information for this account should be:

• Balance: $[________________________________]
• Payment Status: [________________________________]
• Account Status: [________________________________]
• Date of Last Activity: [__/__/____]
• Other corrections: [________________________________]

Section 1.3: Supporting Documentation

The following documents are enclosed to support this dispute:

☐ Copy of current credit report showing the disputed information (from ☐ Equifax ☐ Experian ☐ TransUnion)
☐ Proof of payment (canceled checks, bank statements, payment confirmations)
☐ Settlement agreement or payoff letter
☐ Bankruptcy discharge order and schedules (Case No. [________________________________])
☐ Account statements showing correct balance
☐ Correspondence with the creditor
☐ Court orders or judgments
☐ Texas district court order declaring victim of identity theft (§ 521.101) (if obtained -- see Part 2)
☐ Proof of identity (government-issued photo ID)
☐ Proof of current address
☐ FTC Identity Theft Report (if applicable -- see Part 2)
☐ Police report (if applicable -- see Part 2)
☐ Other: [________________________________]

Section 1.4: Demand for Investigation and Correction

I hereby demand that you:

1. Conduct a reasonable investigation of each disputed item within 30 days of receipt.
2. Review all relevant information I have provided, including all enclosed documentation.
3. Provide written notice of the investigation results, including:
   - Whether each disputed item was found accurate, inaccurate, incomplete, or unverifiable
   - The specific actions taken (correction, deletion, modification, or verification)
   - If verified as accurate, the method of verification and documents relied upon
4. If information is inaccurate, incomplete, or unverifiable, correct, delete, or modify the information and notify each CRA.
5. Do not re-report the disputed information until the investigation is complete.
6. Report the account as "disputed" to all CRAs during and after the investigation.
7. Provide written confirmation of all corrections and CRA notifications.

PART 2: IDENTITY THEFT BLOCK REQUEST

NOTE: Complete this section ONLY if the disputed account resulted from identity theft.

Section 2.1: Identity Theft Declaration

☐ I declare that the account identified above resulted from identity theft. I did not open this account, I did not authorize anyone to open this account on my behalf, and I did not benefit from this account. The account was opened and/or used by an unauthorized person without my knowledge or consent.

Section 2.2: Legal Basis for Identity Theft Block

Federal Law

• 15 U.S.C. § 1681c-2 -- Block of information resulting from identity theft (4 business day CRA block requirement)
• 15 U.S.C. § 1681s-2(a)(6)-(7) -- Furnisher must cease reporting and prevent re-furnishing

Texas Law -- Identity Theft Enforcement and Protection Act (ITEPA)

Texas provides comprehensive identity theft protections through the Identity Theft Enforcement and Protection Act, Tex. Bus. & Com. Code Ch. 521:

Tex. Bus. & Com. Code § 521.051 (Unauthorized Use of Identifying Information):

• Prohibits any person from obtaining, possessing, transferring, or using personal identifying information of another person without consent and with intent to obtain a good, service, insurance, extension of credit, or anything of value in the other person's name
• "Personal identifying information" includes: name, Social Security number, date of birth, driver's license number, bank account number, credit/debit card number, personal identification number, electronic identification number, and biometric data

Tex. Bus. & Com. Code § 521.101 (Court Order Declaring Victim Status):

• A person injured by a violation of § 521.051, or who has filed a criminal complaint under Tex. Penal Code § 32.51, may apply to a Texas district court for an order declaring that the person is a victim of identity theft
• The application may be filed regardless of whether the perpetrator is identified
• After notice and hearing, if the court finds by a preponderance of the evidence that the applicant was injured by a violation of § 521.051 or is a victim of § 32.51, the court shall enter a declaration order
• This court order can be presented to creditors, furnishers, CRAs, and law enforcement to establish victim status and require corrective action

Tex. Bus. & Com. Code § 521.102 (Effect of Court Order):

• The court order serves as official proof of identity theft victim status
• Creditors and furnishers must accept the court order as evidence of identity theft
• The order may direct the furnisher to cease collection and correct records

Tex. Penal Code § 32.51 (Fraudulent Use or Possession of Identifying Information):

• Criminal offense: A person commits an offense if the person obtains, possesses, transfers, or uses an item of identifying information of another person without the other person's consent and with intent to harm or defraud another person
• State jail felony (base offense): 180 days to 2 years in state jail
• Third-degree felony: If less than 5 items or for a person under 18 years old
• Second-degree felony: If 5 to 9 items
• First-degree felony: If 10 to 49 items
• First-degree felony (enhanced): If 50 or more items -- 5 to 99 years or life imprisonment

Tex. Bus. & Com. Code § 20.034 (Security Freeze):

• Texas consumers may place a security freeze on their credit reports
• CRAs must place the freeze within 3 business days of receiving the request
• Identity theft victims may place and lift a security freeze without charge
• Protected consumers (under 16 or incapacitated) may have a freeze placed on their behalf

Section 2.3: Identity Theft Report and Supporting Documentation

The following identity theft documentation is enclosed:

☐ FTC Identity Theft Report from IdentityTheft.gov (Reference No. [________________________________])

• Date filed: [__/__/____]

☐ Police Report (Texas law enforcement)

• Agency: [________________________________]
• Report No.: [________________________________]
• Date filed: [__/__/____]
• Investigating Officer: [________________________________]

Texas Note: Filing a police report under Tex. Penal Code § 32.51 is strongly recommended because: (1) it is required to apply for a court order declaring victim status under § 521.101; (2) it supports criminal prosecution; (3) it strengthens the consumer's position in civil proceedings; and (4) it may support restitution claims. The Texas Attorney General's office provides identity theft resources at texasattorneygeneral.gov.

☐ Texas District Court Order declaring victim of identity theft under § 521.101

• Court: [________________________________] District Court, [________________________________] County, Texas
• Cause No.: [________________________________]
• Date entered: [__/__/____]

☐ Proof of Identity

• ☐ Government-issued photo identification (Texas driver's license, state ID, passport)
• ☐ Social Security card or documentation showing SSN

☐ Proof of Address

• ☐ Utility bill dated within last 60 days
• ☐ Bank or credit card statement dated within last 60 days
• ☐ Government correspondence showing current address

Section 2.4: Furnisher Obligations Under Federal and Texas Law

Upon receipt of this identity theft report and supporting documentation, you are required to:

Under Federal Law (15 U.S.C. § 1681s-2(a)(6)-(7) and § 1681c-2):

1. Cease furnishing the disputed information to any CRA
2. Notify all CRAs to block the information
3. Never re-furnish the blocked information
4. Implement reasonable procedures to prevent re-furnishing

Under Texas Law (Tex. Bus. & Com. Code Ch. 521):

5. Cease all collection activity on the disputed account
6. Do not sell, assign, or transfer the disputed account
7. If presented with a Texas district court order under § 521.101, accept the order as proof of identity theft and take corrective action as directed by the court
8. Cooperate with any law enforcement investigation related to the identity theft
9. Provide written confirmation of all actions taken

Under the TDCA/DTPA (if you are a third-party debt collector):

10. Continuing to collect on a debt you know resulted from identity theft constitutes asserting a right with knowledge that the right does not exist, in violation of Tex. Fin. Code § 392.301(a)(8)
11. Misrepresenting the character of the debt by attributing it to the wrong consumer violates Tex. Fin. Code § 392.304(a)(8)
12. These TDCA violations are automatically DTPA violations under Tex. Fin. Code § 392.101

WARNING: Continuing to furnish information or collect on a debt known to result from identity theft may subject you to:
- FCRA damages (statutory: $100-$1,000 per violation; actual; punitive; attorney's fees)
- TDCA/DTPA treble damages (up to 3x actual damages for knowing or intentional violations)
- DTPA mental anguish damages (for knowing conduct)
- Criminal liability for participating in the use of stolen identifying information

Section 2.5: Application for Texas District Court Order (Information)

If the consumer has not yet obtained a Texas district court order declaring them a victim of identity theft, the following information is provided for reference:

Process Under Tex. Bus. & Com. Code § 521.101:

1. Filing: File an application in any Texas district court. The application should include:
   - A statement that the applicant is a victim of identity theft
   - Identification of the specific accounts, debts, or transactions resulting from identity theft
   - A police report or criminal complaint filed under Tex. Penal Code § 32.51
   - Any supporting documentation (FTC report, credit reports, etc.)

2. Notice: Provide notice of the application to any person against whom the order is sought (e.g., creditors, furnishers, collection agencies)

3. Hearing: The court will conduct a hearing. The standard of proof is preponderance of the evidence

4. Order: If satisfied, the court shall enter an order declaring the applicant a victim of identity theft. The order may:
   - Direct creditors and furnishers to cease collection
   - Direct CRAs to block the fraudulent information
   - Direct correction of public records
   - Provide such other relief as the court deems appropriate

5. Effect: The court order serves as official proof of victim status and must be accepted by creditors, furnishers, and CRAs

Practice Note: The § 521.101 court order is a uniquely powerful Texas tool. Unlike the federal FTC Identity Theft Report (which is self-certified), the Texas court order carries the weight of a judicial finding and is enforceable through contempt proceedings. It is particularly valuable when furnishers or collectors refuse to accept the FTC report alone.

PART 3: CONSEQUENCES OF NON-COMPLIANCE

Section 3.1: Federal Remedies Under FCRA

Willful Noncompliance (15 U.S.C. § 1681n)

• Actual damages or statutory damages of $100 to $1,000 per violation
• Punitive damages
• Attorney's fees and costs

Negligent Noncompliance (15 U.S.C. § 1681o)

• Actual damages
• Attorney's fees and costs

Section 3.2: Texas State Remedies

TDCA/DTPA Combined Remedies (Tex. Fin. Code Ch. 392 + Tex. Bus. & Com. Code Ch. 17)

• Economic damages (actual damages)
• Mental anguish damages (for knowing conduct)
• Treble damages (up to 3x actual damages for knowing or intentional violations)
• Attorney's fees and costs
• Injunctive relief

Texas Identity Theft Enforcement and Protection Act (Bus. & Com. Code Ch. 521)

• Court order directing corrective action (§ 521.101-521.102)
• Contempt proceedings for violation of court order
• The court order approach provides equitable relief that may be more effective than monetary damages in clearing the consumer's records

Texas Penal Code § 32.51

• Criminal referral for furnishers or collectors who knowingly participate in the use of stolen identifying information

Combined Recovery

A consumer may pursue claims under federal law (FCRA), Texas state law (TDCA/DTPA and ITEPA), and potentially criminal referrals simultaneously. The DTPA's treble damages and mental anguish damages provisions make Texas among the most favorable jurisdictions for consumer identity theft claims.

PART 4: PRACTICE TIPS FOR ATTORNEYS

Texas-Specific Strategy

1. DTPA Treble Damages: The TDCA-to-DTPA tie-in (Tex. Fin. Code § 392.101) is the most powerful tool. If the furnisher is also a third-party debt collector, every TDCA violation (including misrepresenting the debt or continuing to collect on identity theft accounts) is automatically a DTPA violation with potentially treble damages and mental anguish damages.

2. 60-Day Pre-Suit Notice: Before filing a DTPA action, you must provide 60 days' written pre-suit notice under Tex. Bus. & Com. Code § 17.505. Include this notice in a follow-up letter if litigation is anticipated.

3. District Court Identity Theft Order: The § 521.101 court order is unique to Texas and extremely valuable. It provides a judicial finding of identity theft that furnishers must accept. Consider filing for this order early in the representation, even before sending the dispute letter, as it significantly strengthens the consumer's position.

4. No Identification of Perpetrator Required: Under § 521.101, the victim may file an application for a court order regardless of whether the perpetrator has been identified. This is critical because most identity theft perpetrators are never caught.

5. One-Party Recording: Texas is a one-party consent state (Tex. Penal Code § 16.02). The consumer may record all telephone conversations with furnishers and collectors without the other party's consent. This can provide valuable evidence of FDCPA and TDCA violations.

6. Dual Filing Strategy: File this direct dispute with the furnisher AND simultaneous CRA disputes. The CRA-mediated dispute triggers § 1681s-2(b) obligations and preserves the federal private right of action.

7. No Wage Garnishment: Remind clients that Texas does not permit wage garnishment for most consumer debts (Tex. Const. Art. XVI, § 28). Even if a fraudulent judgment is entered, the consumer's wages are protected. However, bank account levies may be attempted, making prompt action important.

Venue Considerations

• Federal FCRA claims: Northern District (Dallas, Fort Worth), Southern District (Houston, Corpus Christi), Eastern District (Tyler, Beaumont), or Western District (San Antonio, Austin, El Paso)
• State TDCA/DTPA claims: Texas district court in the appropriate county
• § 521.101 identity theft orders: Any Texas district court
• Consider strategic forum selection based on local jurisprudence

PART 5: RESPONSE TRACKING AND FOLLOW-UP

Furnisher Response Deadline Tracker

If the Furnisher Does Not Respond or Fails to Investigate

1. Send a follow-up demand letter referencing this original dispute
2. Include the 60-day DTPA pre-suit notice (Tex. Bus. & Com. Code § 17.505) in the follow-up letter
3. File complaints with the CFPB (consumerfinance.gov/complaint) and FTC (ftc.gov/complaint)
4. File a complaint with the Texas Attorney General's Consumer Protection Division
5. If a CRA-mediated dispute was also filed, document the furnisher's failure for § 1681s-2(b) litigation
6. Apply for a Texas district court order under § 521.101 (if not already obtained)
7. After the 60-day DTPA notice period expires, consult with counsel regarding filing suit under FCRA § 1681n/§ 1681o and TDCA/DTPA

SIGNATURE AND DELIVERY

By signing below, I affirm under penalty of perjury that the information in this letter is true and correct to the best of my knowledge. I understand that knowingly submitting false information may subject me to criminal penalties under both federal and Texas law.

Consumer/Attorney Signature:

Signature: ________________________________________

Printed Name: [________________________________]

Date: [__/__/____]

Texas State Bar No. (if attorney): [________________________________]

Method of Delivery:

☐ USPS Certified Mail, Return Receipt Requested
Tracking Number: [________________________________]

☐ USPS Priority Mail with Delivery Confirmation
Tracking Number: [________________________________]

☐ FedEx / UPS with Signature Confirmation
Tracking Number: [________________________________]

Date Sent: [__/__/____]

ENCLOSURES CHECKLIST

☐ Copy of credit report showing disputed information
☐ Proof of payment / settlement documentation
☐ Bankruptcy discharge order (if applicable)
☐ FTC Identity Theft Report (if applicable)
☐ Police report (if applicable)
☐ Texas district court order under § 521.101 (if obtained)
☐ Government-issued photo identification
☐ Proof of current address
☐ Account statements or correspondence
☐ Security freeze confirmation (if applicable)
☐ Other supporting documentation: [________________________________]

SOURCES AND REFERENCES

• Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x: https://www.law.cornell.edu/uscode/text/15/chapter-41/subchapter-III
• 15 U.S.C. § 1681s-2 (Furnisher Responsibilities): https://www.law.cornell.edu/uscode/text/15/1681s-2
• 15 U.S.C. § 1681c-2 (Identity Theft Block): https://www.law.cornell.edu/uscode/text/15/1681c-2
• 12 C.F.R. Part 1022, Subpart E (CFPB Furnisher Duties): https://www.ecfr.gov/current/title-12/chapter-X/part-1022/subpart-E
• Texas Identity Theft Enforcement and Protection Act, Tex. Bus. & Com. Code Ch. 521: https://statutes.capitol.texas.gov/docs/bc/htm/bc.521.htm
• Tex. Bus. & Com. Code § 521.101 (Court Order): https://texas.public.law/statutes/tex._bus._and_com._code_section_521.101
• Tex. Penal Code § 32.51 (Fraudulent Use of Identifying Information): https://statutes.capitol.texas.gov/Docs/PE/htm/PE.32.htm
• Tex. Bus. & Com. Code § 20.034 (Security Freeze): https://statutes.capitol.texas.gov/Docs/BC/htm/BC.20.htm
• Texas Debt Collection Act, Tex. Fin. Code Ch. 392: https://statutes.capitol.texas.gov/Docs/FI/htm/FI.392.htm
• Texas DTPA, Tex. Bus. & Com. Code Ch. 17: https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm
• CFPB Circular 2022-07 (Reasonable Investigation): https://www.consumerfinance.gov/compliance/circulars/consumer-financial-protection-circular-2022-07/
• Texas Attorney General Identity Theft Resources: https://www.texasattorneygeneral.gov/consumer-protection/file-consumer-complaint/consumer-privacy-rights/identity-theft-enforcement-and-protection-act
• Texas SOS Debt Collector Registration: https://www.sos.state.tx.us/statdoc/faqs2900.shtml
• FTC Identity Theft Resources: https://www.identitytheft.gov/
• CFPB Complaint Portal: https://www.consumerfinance.gov/complaint/