Is a credit privacy number (CPN) legal?
The Allure of CPNs A credit privacy number (CPN) is simply another social security number that some companies offer to purchase to consumers as a method of establishing a different credit profile. The concept is that if you have bad credit or no credit history linked with your real SSN, then you can easily get a new CPN that is not reported to the credit bureau and can enjoy loans, credit cards, etc. under the new number. This quite understandably goes well with people with low credit scores. Establishing credit the old traditional way by providing your genuine social security number and then taking years to rebuild your credit score may be very tasking. A CPN appears to be a way of gaining good credit in a short span.
Are CPNs Legal? The short answer is no. CPN is not supposed to be used to disguise one’s true identity to establish a fake credit history. It is important to note that the actual implementation of CPNs is not unlawful per se. They are used by ordinary individuals who need a method of protecting their social security numbers for whatever reason; this may apply to people who are abused in their homes or harassed by stalkers. However, utilizing a CPN to sign up for other accounts and procuring credit using other people’s identity and at the same time concealing negative credit associated with one’s genuine identity is fraudulent and an act of identity theft.
Why CPNs Are Considered Fraudulent If you apply for any sort of credit – a credit card, an auto loan, a mortgage, and the like – the provider will ask for your name, your date of birth, and your social security number so that they can obtain a credit report. They wish to pull your credit report so that they may assess the level of risk in extending credit to you. This hides the true credit history from the lender by providing fake documents and a fake social security number. They will not know that due to your bad credit score, the risk of extending credit to you has been raised. Misrepresenting any fact to get credit is fraud.
Also, if creating those accounts under a fake identity, they may simply take over the credit activity of some poor soul who had those numbers assigned to them at random. This is because if another person has used your social security number to open other fraudulent accounts, you may wake up one day and find that those accounts have been included in your credit reports.
CPN Companies Under Investigation This is particularly true when it comes to thinking that you can afford to use a CPN since law enforcement has been tough on this. In 2019, the founder of one of the leading CPN companies was arrested and given 7 years of imprisonment and mandated to pay $14. 3 million in fines. Those in authority know for sure such companies are involved in fraud and will keep on with efforts to disband them. The Federal Trade Commission has long advised consumers not to use CPNs as an unfair means of getting credit.
If a fraudster uses a CPN, he risks being charged criminally, having his accounts shut down, facing wage garnishment from civil judgments, and damage to his real credit reports permanently. It is just not worth it given the dangers that are associated with it.
Building Credit Legally However, if one wants to establish credit with no credit history or bad credit history it is possible to do so without having to fraudulently use what is called a CPN. Being an authorized user on someone else’s credit card account, obtaining a secured credit card or a credit builder loan enables you to begin establishing a positive credit history. Continuing to pay all of your bills on time, having low credit utilization, and applying for credit only occasionally will get you on the right track to good credit. While it may require some significant effort and time, the benefits of achieving and maintaining high credit scores without the risk of being a fraud or facing legal action are worth it.
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