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Domestic abuse is not limited to physical or emotional harm or threats. It can take the form of economic abuse in which an abuser restricts or controls how the victim can use, acquire, and maintain money. One example of economic abuse is coerced debt where the abuser creates fraudulent accounts or acquires debt in the victim’s name or where the abuser forces the victim to incur debt. Because coerced debt is a form of identity theft, it is a crime. Texas Penal Code § 32.51(b)(1) states that “[a] person commits the offense [of fraudulent use or possession of identifying information] if the person, with the intent to harm or defraud another, obtains, possesses, transfers, or uses an item of identifying information of another person without the other person’s consent or effective consent.” Some legal experts believe that the addition of the phrase “effective consent” in 2019 to the statute’s language opened the door for victim’s of domestic abuse to charge their spouse’s with identity theft.
To help survivors of financial abuse, Texas Appleseed, a nonprofit organization promoting social and economic justice, has teamed up with the Texas Coalition on Coerced Debt to create the Coerced Debt Toolkit: Addressing Identity Theft for Survivors of Financial Abuse. The toolkit is divided into five guides that will help users recognize the signs of financial abuse and will offer them some strategies to address it.
Guide 1: Understand
Before an individual can get relief, she (or he) must first understand what coerced debt is. The toolkit offers some examples of coerced debt to help victims recognize that what is happening to them is, in fact, a form of financial abuse and that such abuse is not necessarily limited to those involved in an intimate relationship. Users will also learn the importance of knowing whether they were victims of coerced debt and how such debt can affect their credit history and credit score negatively. They will also discover what to do and what to avoid if they believe that they have coerced debt.
Guide 2: Protect
The second guide in the toolkit aims to protect individuals from becoming future victims of financial abuse. The guide provides several steps that can be taken, the first and foremost of which is to make sure that they are safe. Once their safety is ensured, it is recommended that they change online account information, if possible; get a credit freeze or put a fraud alert in place; collect important documents; and file an application for a protective order for added security.
Guide 3: Discover
This section offers guidance for situations where debt was incurred or accounts were opened in the victim’s name, where the victim was denied credit, housing, or a job because of credit history, or where the victim was contacted by a debt collector. Some steps include requesting credit reports and making sure that the debt is real.
Guide 4: Dispute
When dealing with debt, coerced or not, it is important to know one’s rights and understand that it may be possible to block coerced debt when a credit report. From this guide, users will learn how to dispute a debt that they did not incur. Steps include discovering the details of the debt, filing an identity theft report, drafting a dispute letter with the consumer reporting agency, and challenging the debt with the business that provided the debt information to the consumer reporting agency.
Guide 5: Defend
The last section of the toolkit explains what to do in the event that a lawsuit to recover the amount of debt owed is filed against the victim. It explains the importance of responding to the lawsuit and not simply ignoring it, even if one believes that the debt is not his or her own. A sample form to respond to a debt collection lawsuit is provided in the toolkit. Additionally, the guide describes what may happen after an answer is filed and what may occur if a default judgment is rendered against the victim.
Also included in the toolkit are some sample forms and letters, such as an AnnualCreditReport.com request form and a letter for disputing a fraudulent debt with a consumer reporting agency. There is also a glossary and a list of domestic abuse and legal resources.
For more information about identify theft in general, please visit IdentityTheft.gov or the website of the Attorney General of Texas. To learn more about coerced debt in Texas, please see Abuse by Credit: The Problem of Coerced Debt in Texas.