Using File Segregation
to Fraudulently Repair Credit
If you have recently filed for bankruptcy, you may
receive a letter from a credit repair company that tells you about
your inability to get credit cards, personal loans, or any other
types of credit for ten years. Their brochures tout the wonderful
possibilities gained by using their services.
"ERASE BAD CREDIT" "A NEW CLEAN
CREDIT FILE IN JUST 30 DAYS!"
CAN HAVE A NEW CREDIT FILE INSTANTLY OVERNIGHT,"
ALL OVER AGAIN WITH BRAND NEW CREDIT,"
So you call them up to find out how they can help someone in your
"Until today, you had no choice, but thanks to our
unique, innovative program you can obtain a totally clean credit
file in just thirty days!!!"
"A clean file? That sounds pretty amazing!"
"That's right! You see there's a program that the government
just put out a couple of months ago called "Fresh Start" which
is giving consumers, such as yourself, who have poor credit, a
second chance. With this program you can get a new number which
acts as your SSI number strictly for credit
"A new number? What will that do?"
"For only $129 we help you hide your bankruptcy
and establish a new credit identity to use when you apply for
credit. We provide you with the instructions you need
to apply properly to the Internal Revenue Service for employer
or taxpayer identification numbers."
"Is that legal?"
"This unique and virtually unknown program is 100% legal,
and can work every time!!!
"Are you sure?"
"It's not only legal, it's your right."
"Okay, So I get this new number. Then what?"
"After you receive your EIN, you use it in
place of your Social Security Number when you apply for credit.
Then just use a new mailing address and some new credit references."
"How do I get new references?"
"It helps if you develop a whole new credit profile by doing
such things as getting a new driver's license using the new I.D.
number and going to places that will give you "starter credit" using
the new number."
"It sounds complex."
"With our special system it's fast and convenient. Please
keep in mind that it does not matter what you have on your credit
file. This program will even show you how to repair your
old credit file, while you enjoy your AAA credit,
in as little as 30 days."
"It sound's good."
"It is good. Let's just take down your banking
info and we'll get that right out to you."
They place ads in newspapers, magazines or on the Internet, selling
a service they say can help you create a new credit identity.
They target very vulnerable consumers and prey on people who are
plagued by poor credit — people who may be desperate to develop
a clean credit history so they can get a loan, get a job or buy a
The IRS wants you to get the message that using a false Social
Security number — such as a taxpayer I.D. number — to
apply for credit violates federal law and will only compound your
Typically, EINs, which resemble Social Security Numbers,
are used by businesses to report financial information to the IRS
and the Social Security Administration. File segregation
scammers say they can show you how to create a whole, new credit
identity. They tell you their scheme is legal. In short, they lie
to you, take your money, and turn you into a lawbreaker.
One file segregation outfit encouraged consumers to create a new
credit file by fabricating a business, registering a "DBA" (Doing
Business As), and then using the DBA to open
checking accounts, have commercial credit reporting agencies track
the fraudulent accounts.
The fact is that it takes time to rebuild a good credit reputation. Each
creditor has its own criteria for granting credit. While one may
reject your application because of a bankruptcy, another may grant
you credit shortly after you file for bankruptcy. And, given a
new reliable payment record, your chances of getting credit will
probably increase as time passes.
There is no legal way for you to alter your credit identification
to conceal adverse information that is accurate and timely.
"For the past five years we have seen a significant number
of fraudulent schemes involving the illegal use of federal employer
identification numbers," said William Cowan, of the Treasury
Inspector General. "Individuals who are selling the idea of
using these IRS issued employer identification
numbers illegally will be aggressively investigated and prosecuted."