Identity Theft Red Flags in Collections: When to Pause, Escalate, or Verify

During the FTC’s Identity Theft Awareness Week, accounts receivable management professionals are reminded that recognizing early warning signs — and responding appropriately — can reduce disputes, complaints and compliance risk.

01/29/2026

Identity theft can appear in many forms, including unauthorized account openings, misuse of existing accounts, or the use of stolen personal information to obtain goods or services. Identity theft often surfaces during the collections process, such as when a consumer disputes an account by claiming it does not belong to them or that it resulted from fraud. This places agencies in the position of balancing effective account resolution with legal and compliance obligations.

During Identity Theft Awareness Week, Jan. 26–30, a nationwide initiative led by the Federal Trade Commission (FTC), the agency and its partners have shared tools and events to help people spot, avoid, report and recover from identity theft.

Federal consumer protection agencies are also highlighting the importance of recognizing red flags that may indicate fraud — and knowing when to pause collection activity, escalate concerns or verify information.

Common Identity Theft Red Flags in Collections

Collectors may encounter several warning signs that warrant closer review, including:

• A consumer states the account is the result of identity theft or fraud.
• Contact information that doesn’t match account records.
• Consumers report unfamiliar charges or accounts they do not recognize.
• Multiple disputes involving the same consumer information across different accounts.
• A consumer provides an identity theft report or affidavit generated through IdentityTheft.gov.

IdentityTheft.gov provides step-by-step guidance and sample letters that consumers can generate, track and save to help prove identity theft.

When to Pause Collection Activity

When credible indicators of identity theft are present, continuing collection activity without review can increase risk. Best practices suggest pausing collection efforts while a claim is evaluated, especially when a consumer provides an identity theft report from IdentityTheft.gov — which businesses can use as documentation that fraud has been reported to the FTC.

Pausing activity does not mean accepting every claim at face value, but it does allow agencies to avoid actions that could later be challenged as unreasonable or unfair under federal or state laws. In some states, receiving certain documentation from a consumer can trigger specific legal obligations. As a result, it is important for agencies to understand and follow the requirements in the states where they operate.

When to Escalate Internally

Certain situations should be elevated to compliance or management teams, including:

• Disputes supported by an FTC identity theft report.
• Conflicting or incomplete account documentation.
• Repeated identity theft claims involving the same consumer information.
• Accounts that may impact credit reporting or litigation decisions.

Escalation ensures consistency in how claims are handled and helps agencies document good-faith decision-making.

When Documentation is Appropriate

Documentation remains an important step, but collectors should avoid requesting unnecessary or excessive information. IdentityTheft.gov outlines what consumers may provide — such as police reports, FTC identity theft affidavits or other supporting records — depending on their situation.

Why This Matters

Failing to recognize identity theft red flags can lead to increased disputes, complaints and compliance exposure — while demanding excessive documentation can strain consumer trust. Identity Theft Awareness Week serves as a timely reminder that effective collections require not only accuracy, but judgment.

By knowing when to pause, escalate or verify, agencies can better protect consumers, reduce risk, and demonstrate compliance with evolving expectations around identity theft and fraud.

ACA Tools to Help

ACA offers tools to help members stay compliant while navigating identity theft-related obligations and state-specific requirements.

• Visit the ACA SearchPoint library to access a complete library of compliance resources essential to running an agency.
• Members should use ACA’s State Guide for state-by-state summaries of collection and consumer protection laws, including identity theft and collection laws.

Remember, subscribe to ACA Daily and Member Alerts under your My ACA Assistant profile when logged in to acainternational.org.