Better Credit by “Piggybacking”?

Is it possible for a person with bad credit to inflate his/her own credit score and get the money-saving benefits of better credit by “piggybacking” on the credit of a stranger? That’s how a Denver-based business pitched its services to cash-strapped consumers. But the Federal Trade Commission says the defendants couldn’t back up their score improvement claims and engaged in several illegal practices that violated the FTC Act, the Credit Repair Organizations Act (CROA), and the Telemarketing Sales Rule.

BoostMyScore and CEO William O. Airy claimed to offer consumers “the amazing benefit” of having another person’s credit “‘copied and pasted’ on to your credit report,” giving the buyer “the biggest possible FICO® score boost in less than 60 days; and it’s guaranteed!” Here’s how the defendants described their services, for which they charged consumers between $325 to $4,000 – or even more:

Online and in radio ads, the defendants promised consumers concrete benefits – for example, qualifying for a mortgage. According to one promotional piece, “ . . . many of our customers realize a jump of about 120 points in as little as two weeks. What would a credit score increase of that size mean for you? If you are like most people, that could be the difference between having your mortgage application approved or not.”

The settlement prohibits the defendants from marketing credit repair services that attempt to add an authorized user to anyone’s credit unless that person has actual access. In addition to other provisions to protect consumers in the future, the proposed order prohibits misrepresentations about the legality of credit piggybacking. Most of the proposed $6.6 million judgment would be suspended due to the defendants’ financial condition.

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Teaching Suggestions

• Ask students if it is possible to boost their own credit scores by someone else’s good credit.
• Ask students if they know what information creditors use in determining whether a loan will be approved or denied.

Discussion Questions

1. What can be done to prevent companies such as Boost My Score, to stop deceiving already financially-strapped consumers?
2. How effective are the cease-and-desist orders and fines by the Federal Trade Commission, if the defendants don’t have to pay due to their financial condition?
3. What are the true and tried methods of improving your credit scores?