It's Not Identity Theft, More Like Identity Rental.
Paging George Costanza! We have Vandelay Industries
on line one, at least that's what it seems in this New York Times article. Back in the day when people were complaining about the Seinfeld finale instead of the Sopranos finale , one of the main characters attempted to fake employment.He claimed to be working for Vandelay Industries as a
Latex salesman, although he is only trying to be hired by Vandelay Industries, the fake latex company which holds Jerry's phone number, so that he is still able to obtain unemployment checks, because that qualifies as legitimately looking for work.
What's going on out there in the "reality based community" isn't that far afield from the old days of Seinfeld. Here's a comeon that would warm the cockles of George Costanzas' heart.
Want to buy a home, but hampered by bad credit, an empty bank account or no job? No problem!
That may sound like an exaggeration of a late-night infomercial. But it is, in effect, the pitch that a number of Web sites are making to consumers, saying insolvent home shoppers can be made to look more attractive to lenders.
The sites, for example, offer better credit scores by hitching customers to a stranger’s credit card, or providing them pay stubs from a bogus company. One has even offered a well-stocked bank account to rent for a month or two.
Industry experts say these sites, which are relatively new, played a role in fueling the rampant mortgage fraud that has caused a huge spike in loan defaults in recent months because people bought homes they could not afford.
“There is a whole underground world — an online cottage industry — that has grown up that allows anyone to commit mortgage fraud,” said Constance Wilson, executive vice president at the financial fraud detection firm Interthinx.
I was reading an article online the other day about a company that sells commencement addresses to high school valedictorians, there are companies that sell term papers, and even fake degress from prestigious "uncredited universities" where one could even claim to be a "marine biologist" (Georges' dream job). It appears that it's now possible to ride through life on a magic carpet on fake paper.
When one looks at the numbers involved in this fraud how can anyone question the rising tide of foreclosures that are being predicted.
An examination of loans made last year, including prime and subprime, in which some sort of fraud occurred, showed that incidents of false tax or financial statements had risen to 27 percent from 17 percent in 2002; fraudulent verifications of deposit had climbed to 22 percent from 15 percent four years ago; and false credit reports rose to 9 percent from 5 percent in 2002, according to a report issued this spring by the Mortgage Asset Research Institute based in Virginia.
If any documents were required, it was unclear whether the bogus documents were created by do-it-yourselfers or whether they turned to the products and services sold over the Internet.
Excactly how does this little gambit work? Weeelllllll.....
One site, RaiseCreditScoreNow .com, offers to add a person to four separate $20,000 credit lines with 10 years of “perfect payments” for $4,000 (although they do not have access to the actual credit line). Doing so could increase an individual’s credit score by as much as 200 points in 90 days, the site says, and make the difference between qualifying for a home loan or not.
People with strong credit scores and a reliable payment history of at least 24 months on various credit accounts can be paid up to $1,000 for each person they add to the account as an authorized user, the site offers.
Several lawyers said it was unlikely that this practice was illegal, although many warned it could open the person renting out their credit card lines to fraud or identify theft. Attempts to contact the Web site were unsuccessful.
Yeah, I'm sure they were. I'd love to meet the doofuses they talk into renting out their good credit for these purposes. I can't imagine anyone wioth a decent credit record that would need 1000 dollars that badly.
Offically, the term is called "Piggybacking" and of course it's "technically not illegal" which explains a whole lot of what we're seeing out there. Of course the FICO people have now gotten wise and in a world beating case of closing the barn door after the horse has not only gotten out, but won the Triple Crown and gone to stud, declare:
Last week, the Fair Isaac Corporation, the company that developed FICO credit scores, said it was trying to shut down piggybacking.
Starting in September, Fair Isaac said people who were added to someone else’s credit line would not benefit from the secondhand credit history in its formula, which is used by the three major credit bureaus.
“There is going to be no way to get around the new system,” said Ron Totaro, vice president for global scoring solutions at Fair Isaac.
I think the operative word for this is "trying". If that's the best they can do they deserve everything they get.
However, this whole mess speaks to a bigger problem. If there has been fraud on this wide a scale, then our lawmakers are going to have to worry about more than just catching the bad guys pulling off the capers. They are going to have to worry about the lawabiding taxpayers out there for whom piggybacking was a ride that ended at the age of 5. Those people are not going to look fondly on any "Mortgage Bailouts"that come out of their pockets. After all, just because you've gotten away with robbing my bank it doesn't mean I have to help you carry the safe to the get-away car.