Posted on: 19th Feb, 2007 01:01 pm
is file segregation legal?
Hi Cameron,
Welcome to Mortgagefit forum.
File Segregation is illegal. If you fall into the trap of any credit repair company offering such scheme, you may face fines and even prison sentence.
In such a scheme you will be promised of help in establishing a new credit identity. After you pay the fee for their service such companies will ask you to apply for a EIN (Employer Identification Number). EIN which resembles a SSN is given by IRS to businesses to report financial information to them & to Social Security Administration.
After you get the EIN, these companies will tell you to use this EIN instead of the SSN when applying for credit. They will also ask you to use a new address for mailing & some credit references.
To obtain an Employer Identification Number from Internal Revenue Service under false pretenses is a federal crime and you can get penalized if caught. File segregation would also likely constitute a civil fraud as per laws in many of the states.
Colin
Welcome to Mortgagefit forum.
File Segregation is illegal. If you fall into the trap of any credit repair company offering such scheme, you may face fines and even prison sentence.
In such a scheme you will be promised of help in establishing a new credit identity. After you pay the fee for their service such companies will ask you to apply for a EIN (Employer Identification Number). EIN which resembles a SSN is given by IRS to businesses to report financial information to them & to Social Security Administration.
After you get the EIN, these companies will tell you to use this EIN instead of the SSN when applying for credit. They will also ask you to use a new address for mailing & some credit references.
To obtain an Employer Identification Number from Internal Revenue Service under false pretenses is a federal crime and you can get penalized if caught. File segregation would also likely constitute a civil fraud as per laws in many of the states.
Colin
Some thing I know about these companies is that they will claim their file segregation program is affiliated with the federal government. Let me tell you that companies which offer such programs are not supported by federal government. The federal government is also not involved in working with them in any other way.
So beware of not falling into their trap.
So beware of not falling into their trap.