On September 16, 2016, Governor Jerry Brown signed Assembly Bill (“A.B.”) No. 1723 entitled the Identity Theft Resolution Act (the “Act”) into law.  The Act amended Sections 1785.16.2 and 1788.2 of the California Civil Code related to debt collection, which will become effective on January 1, 2017.  The Act is a rare display of political bipartisanship as it was passed unanimously by the Banking and Finance Assembly, the Senate and Assembly Judiciaries, and the Senate and Assembly Floors.  In summary, the Act requires debt collectors, when informed by a debtor that a debt is the result of fraud or identity theft, to engage in necessary due diligence to make a determination of whether the debt actually belongs to the debtor.    The Act was enacted to account for the increasing rise in identity theft.  Identity theft is an unfortunate reality of today’s world. Existing law requires a debt collector that receives a copy of a police report filed by the debtor alleging that the debtor was the victim of an identity theft crime, and a written statement in which the debtor claimed to be the victim of identity theft, to investigate the claim.  The investigation must consider all of the information provided by the debtor and other information available to the debt collector.  The debt collector is only permitted to resume debt collection activities upon making a good faith determination that the information provided does not confirm the consumer’s claim of identity theft. The Act amended the existing law to require specific affirmative action by debt collectors in these situations.  Specifically, the debt collector, upon receipt of the police report and written statement from the debtor, if it furnished adverse information about the debtor to a consumer credit reporting agency (“CCRA”), must notify the CCRA that the account is disputed, and initiate a review within 10 business days.  The Act further requires debt collectors to send notice of its determination to the debtor within 10 business days after concluding its review.  A debt collector that does not recommence collection activities under these provisions must notify the creditor, within 10 business days after making its determination, and if it furnished adverse information to a CCRA, must notify the agency to delete that information within 10 business days after making its determination.  The Act also prohibits a creditor from selling a consumer debt to a debt collector if the creditor has received notice that the debt collector has terminated debt collection activities, as described above.