Consumers with poor credit can be vulnerable to scams promising to “repair bad credit” or offering “a new credit identity” fast. One such scam is an offer to sell you a Credit Privacy Number, or CPN, to use instead of your Social Security Number (SSN). The scammer, often posing as a credit repair company, may claim that using a CPN frees you from the credit profile tied to your SSN. Not only is this not true, but entering a CPN in the SSN field on credit applications is fraud and a federal crime!
Fraudsters peddling CPNs might also encourage you to lie about other parts of your personal information, like your name, address, and/or phone number when you use that CPN instead of an SSN. They are essentially claiming that, by doing so, the number isn’t linked to you directly and you won’t have to pay back the debt after using it to borrow money or get credit. This claim is also untrue. You should never purchase a CPN (which are often stolen SSNs) and/or falsify your personal details (to create an alternate identity) when applying for credit cards or loans.
An NBC station in Dallas-Ft. Worth reported on the story of Texas resident Swatisha Keith, who paid $1,500 for a CPN through a Craigslist ad. The seller told Swatisha she could use the CPN to apply for credit and establish a new credit history. She used the CPN successfully to apply for a credit card and a car loan. But within two months, a federal agent showed up at her workplace to arrest her (see the video: “‘Quick Fix’ to Bad Credit Is Landing Some People in Jail”).
Sadly, what happened to Swatisha is a harsh consequence of falling for something that sounds too good to be true. How can you protect yourself? Read up on why and how to avoid CPN scams with the following Q&A.
What is a CPN?
CPN stands for Credit Privacy Number (also known as a Credit Profile Number or Credit Protection Number) and is a nine-digit number with the same formatting as a Social Security Number (###-###-####). Disreputable “credit repair” companies and fraudsters often offer CPNs for sale or offer CPNs as part of a larger package of services, but anyone asking you to buy a CPN or promising that you can create a new credit identity with one is scamming you.
How are illegal Credit Privacy Numbers created?
Criminals often steal SSNs from children, the incarcerated, as well as the elderly, to sell as CPNs. This also happens with the SSNs of deceased persons. They presumably choose these groups because there is less activity (or no activity) on their accounts, typically for years at a time.
Less commonly, scammers (or companies fronting the scam) use a randomizer based on a computer algorithm to generate CPNs, then check that list against an (illegal) online validator to see which fakes pass for the real thing (a SSN) when combined with other personal details. This, and other methods of doing something similar, is called synthetic identity fraud.
Why are Credit Privacy Numbers used?
Credit privacy numbers are typically used knowingly or unknowingly to hide a person’s identity and to achieve monetary gain. Fraudsters can use CPNs in combination with other personal identifiable information to open bank accounts, apply for loans and credit cards, and cause other damage to the person assigned to the Social Security Number they stole. But others can be scammed into buying CPNs as a way to hide a poor credit history by using that instead of their SSN when applying for credit. This second group may not realize that what they are doing is fraudulent and against the law.
How do I recognize a CPN scam?
Some red flags of a credit privacy number scam are when a person or business does one or more of the following:
- Offers to sell you a new credit identity
- Promises to repair your credit fast
- Expects payment up front, before you receive any services
- Asks you to lie about other personal details (name, address, phone number, etc.)
- Creates a false sense of urgency or bullies you into making a purchase
- Claims that celebrities and government officials use purchased CPNs, too
- Fails to explain your rights (as a legitimate credit repair company would) under the Credit Repair Organizations Act
Sellers have also been known to misquote the Privacy Act of 1974 to reassure customers, but they are cherry-picking. They focus on the part of the Act that says Americans can’t be forced to give their SSNs to a third party unless required by federal law, like on a passport application. What the seller doesn’t say is that you are breaking federal law if you give anything but your true SSN to lenders when asked for that information on a credit application.
Can I change my Social Security Number?
The Social Security Administration will only allow you to change your Social Security Number under very limited conditions. The need for a credit do-over is not one of them. Even if you qualify for a new SSN, the new number will be tied to the old one, so your credit report content will still be there. You would make the request during an in-person appointment at your local Social Security office.
Are there any legal CPNs?
CPNs currently have no official legal standing and operate in a legal “gray” area. Selling them as a way to repair credit or using them in the SSN field on credit applications is illegal. In the rare cases where people qualify for a new SSN, the Social Security Administration doesn’t refer to these as CPNs. Your best bet to protect yourself from CPN scams is to assume that purchased CPNs are illegal and to steer clear of them entirely.
How do I repair my credit legally?
You don’t have to pay someone else or a credit repair company to improve your credit score. Things you can do yourself:
- Review your credit reports from all three major credit bureaus (Experian, TransUnion, and Equifax) and dispute any errors
- Pay all of your bills on time, the single largest factor in your credit score
- Reduce the debt you owe until it’s below 30% of the total credit approved (credit utilization ratio)
- Keep credit accounts open, as length of credit history improves your credit score
- Limit the number of new credit applications, as frequent inquiries reduce your credit score
It can take months or years to see the results you want, depending on how much your credit profile needs to improve. But it is worth it to rebuild your credit the right way.
For more information about financial fraud, see our Protect Yourself from Scams page.
This blog is not intended to provide any tax, legal, financial planning, insurance, accounting, investment, or any other kind of professional advice or services. To make sure that any information or suggestions in this blog fit your particular circumstances, you should consult with an appropriate tax or legal professional before acting on any suggestions or information that we provide.
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Friedman, Scott (2020, Jan. 31). ‘Quick Fix’ to Bad Credit is Landing Some People in Jail. NBCUniversal Media. https://www.nbcdfw.com/investigations/uick-fix-to-bad-credit-is-landing-some-people-in-jail/2301785/.
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