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  • Joy Greenwood

What They Don't Tell You Can Hurt You


I guess it's just that time of year when deceptive advertising flows a little thicker, but I have been inundated with calls from subscribers being approached with "this program" or "that credit scheme".

In most cases, someone is offering some magical product or service touted as being the "be-all-to-end-all" that will solve all your corporate credit problems.

Whether they're hawking shelf corporations, credit privacy numbers, or credit partnerships, the vultures are sweeping in to feed off desperate business owners. So I thought I would take this time to make sure all my subscribers are aware of these three current half-baked schemes so you have your guard up in advance and save yourself some heartbreak (and some dough)...

SHELF CORPORATIONS (AGED BUSINESS ENTITIES) First of all, shelf corporations are just that... non-existent corporations that have been created and set on a shelf to age. They are then sold to unsuspecting victims who are told in the most flagrant of terms that they will be able to achieve credit on this inactive and unproductive company. Some even promise to get you up to $500,000 in business credit on this fake business. Here's what they don't tell you...

  • They don't tell you that D&B already has archived information on all corporations, so they already know who owned it before you did and when you took over ownership.

  • They don't tell you that as soon as you try to create a new D-U-N-S® number or update the existing credit profile with your own information, D&B is going to move the incorporation date forward to the most recent date they believe you took ownership.

  • They don't tell you that most of the websites that sell shelf corporations (as well as their incorporating agency) have already been "black-balled" by D&B and identified as promoting services that could be used to perpetuate fraud.

  • They don't tell you that all those promises they're making go down the drain (and so does any credit you achieve) as soon as D&B puts two-and-two together.

  • They don't tell you that you and that corporation (as well as any of your legitimate businesses) will be assigned a higher risk status... and not just now, but any businesses you attempt to generate credit for in the future.

  • They don't tell you that they have lived up to their end of the bargain if they get you as little as $1 in credit, yet you will still be out hundreds or even thousands of dollars.

  • They don't tell you that, in most cases, they can legally sell that shelf corporation, but any credit you attempt to achieve using that non-existent corporation may be deemed as bank fraud.

Per US Code, Title 18, Part 1, Chapter 63, Sec. 1344 – BANK FRAUD Whoever knowingly executes, or attempts to execute, a scheme or artifice — (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; — shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

CREDIT PRIVACY NUMBERS A Credit Privacy Number or Credit Profile Number, better known as a CPN, is a nine-digit identification number that acts like a social security number (SSN) and, for certain people, may be used in lieu of an SSN. CPNs are useful for military leaders, movie stars, government officials, or other public figures who are hoping to shield themselves from identity theft. CPNs are typically assigned to victims or witnesses placed under federal protection. Here's what they don't tell you...

  • They don't tell you that, because of their potential to be used by fraudsters, they raise red flags with certain agencies who view them as suspicious, even fraudulent.

  • They don't tell you that the government has placed protective shields around federal funding and its availability to those who attempt to use a CPN as their primary identifier.

  • They don't tell you that you are required by law to disclose your SSN to employers, the Internal Revenue Service, motor vehicle department, federally insured lenders, or when buying a firearm, even if you have a legitimate CPN in place.

  • They don't tell you that, although a CPN can be used when applying for credit cards and obtaining financing that is not government related, the practice has garnished a negative stigma due to some less-than-desirable techniques practiced and the frauds being perpetrated by an unsuspecting public.

  • They don't tell you that they sometimes generate a CPN that turns out to be someone else's SSN, and using it to obtain credit constitutes fraud.

FTC posted scam alert: Credit repair companies who promise a “new credit identity” … “say they can help you hide bad credit history or bankruptcy for a fee. If you pay them, these companies will provide you with a nine-digit number that looks like a Social Security number. They may call it a CPN — a credit profile number or a credit privacy number.” “The credit repair companies may tell you to apply for credit using the CPN or EIN, rather than your own Social Security number. And they may lie and tell you that this process is legal. But it’s a scam. These companies may be selling stolen Social Security numbers, often those taken from children. By using a stolen number as your own, the con artists will have involved you in identity theft.” “If you follow a credit repair company’s advice and commit fraud, you might find yourself in legal trouble. It’s a federal crime to:

  • lie on a credit or loan application

  • misrepresent your Social Security number

  • obtain an EIN from the IRS under false pretenses

The bottom line is that if you use the number they sell you, you could face fines or time in prison.” http://www.consumer.ftc.gov/articles/0225-credit-repair-scams

CREDIT PARTNER PROGRAMS The newest fad involves so-called “credit partner” programs, getting you to add someone who has high personal credit scores to your company report so they look like a part of your business and can vouch for your creditworthiness. The credit “partner” applies for credit in your company name using their credit score to vouch for the loans. Here's what they don't tell you...

  • They don't tell you that (in most cases) YOU don’t get the money, just the credit history... the partner usually gets up to ten times as much on a business loan than they can get with a personal loan.

  • They don't tell you that your company also gets to take responsibility for the debt if the partner doesn't pay the bill on time (which happens a lot).

  • They don't tell you that banks and federal authorities consider credit partners to be a form of bank fraud, and D&B sees it as misrepresentation, which leads to your credit report being placed into Severe Risk status and your credit capability permanently cut-off.

  • They don't tell you that most “partners” have prior history of fraud, and after they have filled their pockets, they usually disappear.

  • They don't tell you that your company will then be considered “over-extended” by banks, lenders, and creditors — so you won't be able to get any additional credit you need to pay off this new debt.

  • They don't tell you that adding anyone to your credit without having legal documents declaring joint responsibility for the debt opens the door for new accounts to be opened without your knowledge or specific consent.

PERSONAL NOTE: I recently spoke to one victim who discovered her "credit partner" had made a $15,000 purchase at a jewelry store in her business name and without her knowledge or consent. Now she can't find him. There is little legal recourse for victims because they knowingly entered into a business arrangement with the specific intention of committing fraud.


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