When you report an unauthorized account, you expect the collection activity to stop. Unfortunately, many consumers find themselves trapped in a cycle of predatory creditors and identity theft debt they never owed.
This exact scenario happened to one California plaintiff. In 2024, she discovered two unauthorized accounts in her name. Best Buy company closed the account immediately. But Capital One concluded there was no evidence of fraud, despite false credit information and the plaintiff living more than 100 miles from where the card was opened and used.
After the plaintiff filed a police and identity theft report, and claims with the credit bureaus, Capital One removed the account. But months later, they reinserted the fraudulent credit while collection calls continued.
When a creditor refuses to close a fraudulent account, they might be violating California debt collection law like the Rosenthal FDCPA. If this has happened to you, here’s what you need to know about California and federal consumer protection laws.
What collectors must stop doing once you report identity theft
When you submit an identity theft notice, police report submission, and validation request, credit bureaus have thirty days to investigate your claim. They must also place an identity theft block (Section 605B Block) on your account within three business days of receiving your request.
During this time, collectors cannot:
- call, email, or send letters demanding payment
- transfer, sell, or place the debt with another collection agency
- report the debt to other financial institutions
If collection harassment continues, you can send a written collection cease. California’s Rosenthal Act (California Civil Code § 1788) protects consumers from abusive, deceptive, or unfair debt collection practices. That means collectors cannot badger or intimidate you while your dispute is being investigated.
The law also bars collectors from false debt communication. Under the federal Fair Debt Collection Practices Act (FDCPA § 1692e(8)), collectors are prohibited from reporting or threatening to report credit information they know or should know is false. This includes the failure to communicate a debt has been disputed.
Statutory penalties and legal remedies under the Rosenthal Act
Consumers harmed by unlawful debt collection may be entitled to more than an account correction. California Civil Code § 1788 (the Rosenthal Act) provides robust legal remedies for victimized consumers, including:
- actual damages for financial losses, lost credit opportunities, and emotional distress
- statutory penalty per violation of $100 to $1,000
- attorneys fees
In more serious cases, punitive damages may be available. These damages generally must meet an oppression malice standard and prove the defendant acted with oppression, fraud, or malice. A court may also grant injunctive relief requiring a collector to stop unlawful practices, correct its records, or stop further collection.
Ignoring an identity theft report, continuing collection, and quietly reinserting false credit isn’t a mistake — it’s breaking the law. You have the right to clear your name and sue for damages. Call Brennan Law and fight back today.