Reporting Credit Card Fraud

QUESTION: Do the local police bother to report a credit card fraud? I heard on another website that Federal Trade Commission rarely investigates a case that is less than $2000, right?

ANSWER: The Federal Trade Commission does not publish its criteria for actually enforcing consumer rights. In my experience, the FTC will only go after an individual or a company that has violated the rights of many consumers.

Generally, the local police may not have the resources to pursue fraud charges. Nevertheless, if you are the victim of any fraud or identity theft, you are encouraged to lodge your complaints with the authorities. I recommend that people complain to the following organizations:

1) your local police;
2) the Federal Trade Commission;
3) the Consumer Financial Protection Bureau;
4) the local Better Business Bureau; and
5) the Attorney General.

Ultimately, even if none of these organizations will do anything proactive for you, you will have a copy of the reports (or complaints) that you will need to send back to the credit card company and/or the credit bureaus to clear your name.

If the police report does not satisfy the credit card company, you might want to go one step further with an affidavit. Depending on the extent of damage to you, you may want to contact a consumer rights attorney to assist in drafting your affidavit.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


What To Include In Your Answer To A Credit Card Lawsuit

QUESTION: I have been sued by a credit card company. I have to file a written answer with the Clerk.

My debt is for 11, 000 dollars. I would like to know what I need to include in the written answer to the district court?

ANSWER: You need to contact a consumer rights attorney for a number of reasons. Firstly, the debt-collection litigation industry is a very-well greased machine in the courthouse. Unless you are an attorney yourself, I would have serious concerns that you may not properly represent yourself.

An experienced consumer rights attorney will also want to review all debt-collection materials and your credit bureau reports to see whether your rights have been violated. In other words, you may have good grounds for a counter-claim.

There are several attorneys in the greater-Houston area that handle consumer rights exclusively. I encourage you to contact an attorney. You might find that you will end up ahead, even if you pay out-of-pocket for representation.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

Using A Credit Card Without Prior Authorization

QUESTION: Can your spouse give you a credit card to use without you signing your signature or authorizing any paperwork you haven’t seen?

Anyone can give you a credit card to use, if they authorized your use with the credit card company. You should find out whether your social security number was used in obtaining the credit card account. If any credit card was taken out (even by your spouse!) without your knowledge, you should dispute it, close it, and ultimately you might need to file a police report for forgery/fraudulent use of your private information. 

The other issue to keep in mind: your spouse may have legally taken the card out using their social security information only. They may be kind enough to give you the card to use at your leisure or discretion. If, however, there is a debt that is built up and your spouse defaults, you might also be sued for the full balance: not just your purchases, but your spouse’s purchases too. The reason for that obligation has to do with Marriage and Community Property laws in the State of Texas. 

I have handled cases in the past where one spouse did not know that the other spouse was running up a debt. Any expenses that are used to benefit the household are joint obligations of both the husband and the wife. If, on the other hand, your spouse is taking vacations alone, you would not necessarily be obligated on that amount of debt. 

You should seek the advice of a family lawyer if your intention is to maintain your marriage as “separate property” as opposed to the usual “community property” which is the default marriage and finance situation in Texas. You should also seek the advice of a consumer lawyer if the account was taken out without your knowledge and it is negatively effecting your credit reports/score.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

QUESTION: You Were Given A Credit Card With Only Your Name On It, Can Your Spouse Also Use It?

There are issues here that also touch upon family law and community property which essentially mean that expenses and debt incurred for the family and the household are owed by both spouses. There are ways to avoid community property, for which I would suggest first consulting with a family law attorney before taking such action. If one’s spouse made charges solely for their personal benefit, the other spouse, for whom the card is officially in their name, might not be obligated to share that burden under a theory of community property. But that spouse would be obligated if they had authorized their spouse to use the card.

The other, and perhaps bigger issue relates to consumer rights and unauthorized use of the credit card. If one spouse takes out a card in the name of the other spouse without their knowledge – even if it was done by the other spouse – an option might be to consider closing the account. Being married and living in a community property state does mean that one must open them self and their credit worthiness up to fraud. In fact, a significant amount of identity theft occurs within families. A suggestion might be to contact the credit card company to find out: who opened the account, why it was opened in one’s name without prior authorization, and whether some of the charges can still be disputed.

I would also strongly recommend pulling a free copy of your credit reports through to find out if there are other accounts in your name that you are not aware of. Finally, it is advisable to consider consulting with a consumer rights attorney.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

If I change my SSN what happens to my debt?

QUESTION: If I change my SSN what happens to my debt? I received a letter in the mail today about an inquiry for credit that I never requested. I don’t know if someone else has my information and/or what damage may have been done that I haven’t noticed. I know I have some debt of my own, but would changing my social security number be like a poor man’s bankruptcy or would it still follow me over to the new number?

ANSWER: The Social Security Administration does not allow anyone, even victims of identity theft, to switch out their old social security number for a new one very easily. While it may be possible to get a new SSN, it is extremely difficult and rare.

I would suggest you pull a free copy of your credit reports through That website was designed to follow Federal Trade Commission regulation to allow every consumer one free credit report from each of the three major credit bureaus every 12 months. It will link you directly to TransUnion, Equifax and Experian.

In reviewing your credit reports, you will want to see whether there are any new accounts that you do not recognize. You can also have a look at the back of the credit report to see whether there are inquiries made by companies that you did not authorize. Hard inquiries are usually made before a lender extends new credit. There are also soft inquiries that are usually made by your existing lenders just to check up on you.

You can request a short-term or long-term fraud alert be linked to your social security number. You should also call the company that mailed you the letter and ask what it’s all about. If you are going to let that bank, or anyone else know that your identity has been stolen, you should send certified mail with a return receipt so that you have a paper trail. You may also want to file a police report that you can attach to your letter to lenders and the major consumer reporting agencies.

Finally, you may want to consult with an attorney. Most attorneys who handle consumer credit and debt collection abuse cases do not charge their clients an up front fee. The reason for this is because the Fair Credit Reporting Act (as well as the Fair Debt Collection Practices Act) allow consumers to collect damages as well as their attorney fees and court costs.

I wish you luck.

These materials have been prepared by Karni Law Firm, P.C. for educational and informational purposes only and are not intended to be legal advice. This communication does not necessarily reflect the opinions of Dana Karni or of Karni Law Firm, P.C. or any of its attorneys, employees, or clients, and are not guaranteed to be correct, complete, or up-to-date. This site is not intended to create, and access to or receipt of information included in this site does not constitute, a lawyer-client relationship. No one should act upon this information without seeking professional counsel. Although we would be pleased to communicate with you by e-mail or otherwise, do not send us information until you speak with one of our lawyers and get authorization to send that information to us. Please be aware that if you communicate with us by e-mail or otherwise in connection with a matter for which we do not already represent you, your communication may not be treated as privileged or confidential. If you communicate with us by e-mail in connection with a matter for which we already represent you, please remember that Internet e-mail is not secure and you may wish to take steps to encrypt sensitive or confidential materials before sending them on the Internet.

I defaulted on a credit card some years back and now this random collection agency is telling me they’ll sue me if I don’t pay.

Consumer “They keep threatening me. Gee, I don’t even know who they are. First it was one company, now this other company is calling and I could swear that there is a third number calling me also.”

* First of all, it’s important to know that creditors CAN sue consumers in state, county, or precinct civil courts for failure to pay a debt.
* Keep in mind that if you get sued, it does not automatically mean that you need to pay the debt.
* Consider your consumer rights. A collector cannot lawfully sue on a debt that is past the statute of limitations which, in Texas, is four years for most debts. That means, that if the date the lawsuit gets filed is more than 4 years after the date of default on the account [usually 30 days after your last payment], you may a defense to the suit. You might also be able to assert that the collection agency or debt buyer is violating YOUR RIGHTS by suing you past the applicable statute of limitations.
* Assuming they sue within the 4 year statute, it still does not mean that you should fold and pay the debt. In many cases, 3rd party debt buyers do not have adequate proof that they own the accounts for which they are suing. If a judge agrees that the plaintiff cannot prove it, you might not be obligated to pay at all. What if the named plaintiff does not actually own the account? It is fair for you to question ownership, especially if you have been contacted by several different collectors. There is no way for the common consumer to know who or what collection agency actually owns the debt.

It is best to consult with a consumer attorney to find out what your rights are.
Remember, this blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, please consult with a local attorney.

You can find a consumer attorney by visiting

There was a judgment taken against me, what happens next?

If there was a judgment issued against you and you do not have the time or resources to try and have it overturned, here are some important things to know about what happens next:
First of all, it will go on your credit report.  The trade line for the judgment creditor will most likely be listed as one of your bad debts.  In addition to that, the judgment itself will also be listed by the clerk of court in the Judgments/Liens/Foreclosures or Public Records section of your credit report.  The trade line under bad debts can only be listed for 7 years like any other debt, however, the judgment can be listed for 10 years. 
Secondly, you may receive what is called “post-judgment discovery requests.”  In these requests, the attorney representing the judgment creditor can ask you about your assets, income and other financial information.  What is scary about this is that if you do not answer these requests the judge may hold you in contempt of the court.  This is the ONLY time that failure to pay a debt will result in jail time.
Lastly, with a judgment issued against you, there is a chance that the judgment creditor will attempt to freeze your bank accounts until the judgment is paid off.
If you have had a judgment issued against you or you just have questions about being sued or credit card debt in general, contact a consumer attorney in your area.  You may find a local consumer attorney by visiting
This blog covers consumer rights as they relate to Texas State law.  If you reside outside of the State of Texas, please contact a local attorney.

What happens if I get sued for a debt?

Most law firms will not call you to warn you that they are planning to sue, you’ll just get sued.   In some circumstances, the debt collection attorney is required to send you an initial demand for payment, this being a letter asking you to pay the debt at least 30 days before they actual file suit.  Whether you actually get this letter or not can be disputed.

There are a number of collection firms in and around the Houston / Harris County area that regularly sue on behalf of banks and debt buyers. Here are a few to look out for:

  • Regent & Associates
  • Michael J. Scott, P.C.
  • Hull & Associates
  • Law Office of Joseph Onwuteaka, P.C.
  • Fulton, Friedman & Gullace
  • Rausch, Sturm, Israel & Hornick
  • Allen Adkins & Associates, P.C.

If you are served with a lawsuit on a credit card debt, it is important that you contact a consumer defense attorney to evaluate your case.  There may be defenses available to you.   Moreover, some debt collection lawsuits may actually implicate YOUR RIGHTS.  You might not be aware if a debt buyer, bill collector and/or their attorney has violated your rights.  Hiring an attorney is also helpful when you are being sued by an original creditor and you know you owe the money as they can help you work out a settlement for less than the amount you owe.

You can find a consumer attorney in your area at

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.