Another scam posting

Posted by Why Chat on January 20, 2002 at 02:19:36:

In Reply to: Re: Deadbeats Win-Nice Guys Lose posted by bbauer on January 20, 2002 at 00:05:22:

Mr. Bauer, whose prior postings have all been in Biking or Playboy newsgroups,is referring to the newest credit "repair" fraud. The following is from the Federal consumer credit protection website.

File Segregation: A New Credit Repair Scam

"I filed for bankruptcy and then got a letter telling me how to hide my unfavorable credit information and get a new credit identity. Is this legal?"
File Segregation is illegal. If you use it, you could face fines or even a prison sentence. If you have filed for bankruptcy, you may receive a letter from a credit repair company that warns you about your inability to get credit cards, personal loans, or any other types of credit for 10 years. For a fee, the company promises to help you hide your bankruptcy and establish a new credit identity to use when you apply for credit. These companies also make pitches in classified ads, on radio and TV, and even over the Internet.
If you pay the fee and sign up for the service, you may be directed to apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Typically, EINs — which resemble Social Security Numbers — are used by businesses to report financial information to the IRS and the Social Security Administration.
After you receive your EIN, the credit repair service will tell you to use it in place of your Social Security Number when you apply for credit. They'll also tell you to use a new mailing address and some credit references.
 The Catch: False Claims
To convince you to establish a new credit identity, the credit repair service is likely to make a variety of false claims. Listen carefully; these false claims, along with the pitch for getting a new credit identity, should alert you to the possibility of fraud. You'll probably hear:
Claim 1: You will not be able to get credit for 10 years (the period of time bankruptcy information may stay on your credit record).
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.
 Claim 2: The company or "file segregation" program is affiliated with the federal government.
The federal government does not support or work with companies that offer such programs.
 Claim 3: The "file segregation" program is legal.
It is a federal crime to make any false statements on a loan or credit application. The credit repair company may advise you to do just that. It is a federal crime to misrepresent your Social Security Number. It also is a federal crime to obtain an EIN from the IRS under false pretenses. Further, you could be charged with mail or wire fraud if you use the mail or the telephone to apply for credit and provide false information. Worse yet, file segregation likely would constitute civil fraud under many state laws

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