The following is based on information found in H L Saffell's book: "REPAIR YOUR CREDIT WITH LITTLE KNOWN SECRETS the scam artists hope you don't find out about". If you would like a copy for your own, CLICK HERE.

FILE SEGREGATION

If you have a bankruptcy on your credit record, you may run into or see the following:

File Segregation is okay because it is backed by the federal government.
Answer: FALSE. The federal government doesn't support File Segregation.

File Segregation is perfectly legal.
Answer: FALSE. You can go to jail and pay a heavy fine by making false statements on your application for credit. By getting and using an EIN number instead of using your social security number, you have committed a crime, both federal and in some states. If you mailed in your application for credit or telephoned it in, you can be prosecuted for fraud.

File Segregation is necessary because with a bankruptcy on your credit record you won't be able to get credit for ten years (the length of time a bankruptcy stays on your record).
Answer: FALSE. Some merchants will give you credit right after a bankruptcy because, as mentioned before, they know it will be some years to go before you can file for bankruptcy again. It all depends upon the creditor with whom you seek to do business. Most banks. however, get pretty testy when they see a bankruptcy on your record.

These are all false statements. What the credit repair outfit is trying to do is to give you a "new identity". To do that they tell you to pay their fee and sign up for their services. Then you are directed to apply for an Employer Identification Number. You apply to the IRS. These numbers which are similar to social security numbers are used by businesses to report income and taxes.

When you get the EIN, you will be told to use that instead of your Social Security number whenever you apply for credit. Also they'll tell you to use a new mailing address and some good credit references. Thus, you "hide" your old record and now have a new one. You also make yourself a prime target for the jailhouse blues. But of course the credit repair scam artists don't tell you that.

The following is from a FTC bulletin:

Rights Under The Credit Repair Organizations Act:

This law prohibits false claims about credit repair and makes it illegal for these operations to charge you until they have performed their services. It requires these companies to tell you about your legal rights. Credit repair companies must provide this in a written contract that also spells out just what services are to be performed, how long it will take to achieve results, the total cost, and any guarantees that are offered. Under the law, these contracts also must explain that consumers have three days to cancel at no charge.

Under the law, you also have the right to sue in federal court. The law allows you to seek either your actual losses or the amount you paid the company whichever is more. You also can seek "punitive" damages: sums of money to punish the company for violating the law. The law also allows class actions in federal court: cases where groups of consumers join together in one lawsuit. If you win, the other side has to pay your attorney’s fees.

Many states have laws regulating credit repair companies, and may be helpful if you’ve lost money to credit repair scams.

If you’ve had a problem with a credit repair company, report the company. Contact your local consumer affairs office or your state attorney general (AG). Many AGs have toll-free consumer hotlines. Check with your local directory assistance.

You also may wish to contact the FTC. Although the Commission cannot resolve individual credit problems for consumers, it can act against a company if it sees a pattern of possible law violations. If you believe a company has engaged in credit fraud, send your complaints to: Consumer Response Center, Federal Trade Commission, Washington, D.C. 20580.

National Fraud Information Center (NFIC), a project of the National Consumers League, also accepts consumer complaints. You can reach NFIC at 1-800-876-7060, 9 a.m. to 5:30 p.m.EST, Monday through Friday. NFIC is a private, nonprofit organization that operates a consumer assistance phone line to provide services and help in filing complaints. NFIC also forwards appropriate complaints to the FTC for entry on its telemarketing fraud database.

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bsaffell@usit.net...Copyright 2008 by Hilmur Saffell...Last Update = 52008