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Interview with a 'piggybacking' website owner

Moderator Emeritus

Interview with a 'piggybacking' website owner


August 13, 2007


Ask John: Interview with a Piggybacker


Last month I had the opportunity to chat with the owner of one of the companies that currently offers “piggybacking” services. Essentially, they target market their services to consumers who have poor credit scores and sell access to credit card accounts.


If you are unfamiliar with the practice, please read our recent article on piggybacking and FICO’s response at


There were five things that I wanted to glean from this interview:


Was the business a “one man show,” or did he employ a staff?


Was he familiar with state and federal laws regulating companies that provide credit repair services and had he ever received any feedback from regulators regarding his services?


Was he aware of the firestorm ignited in both the credit and regulatory communities by the emerging “piggybacking” industry?


Did he believe that his company could still prosper, indeed even survive, in an environment where FICO® is closing the scoring loophole regarding “piggybacking” in September?


Was he and/or any other member of his staff familiar – at any level - with credit reporting, credit scoring and/or the workings of the credit system?


About the Company


He is a fairly young fellow. Under 30, he has been running this business for some three years. He said he has never worked in the credit industry. It would appear, for his purposes, he was simply in the “right place” at the “right time” when lightening struck.  In his world, he hit the lottery: his annual revenues exceed $1,000,000.


He said that his business was thriving before all of the press coverage. However, in light of recent developments, one might argue that coming up so hard and fast over the public radar may not have been such a positive development for his growth prospects (or that of similar organizations) as it has stirred the sleeping behemoths of the credit industry and peaked the curiosity of a number of politicians and regulators.


The company employs two “credit experts” that consult with people on the best way to improve their credit scores. When I inquired as to their qualifications, he said that they knew how to read and interpret a credit report. Further, he said that he has a former loan officer on staff.


As a credit industry veteran of 16 years, I was pretty unsettled by this response. Afterall,  these folks are advising consumers as to the best course of action to take with their credit. They have placed themselves in a position of trust and the best he could say was that “they knew how to read and interpret a credit report.”


Reflecting upon our conversation, I believe – if pressed -- he would admit that his own knowledge of credit is somewhat limited.


This opinion was reinforced when I read a recent email he sent to his subscribers with credit “facts.” I wasn’t particularly comfortable with the accuracy of the information that I reviewed.


I remain concerned that neither he, nor his staff, possesses the knowledge base of even entry-level customer service reps at the credit bureaus.


About The Law


In our interview, the owner said that he was “somewhat” familiar with the Credit Repair Organizations Act ( CROA ). In response to one of my questions, he grudgingly admitted that they are, by legal definition, a credit repair company but believed that they comply with the provisions of CROA. He then told me that they are not bonded in every state where they have customers. Most, if not all, states require companies that perform credit repair services for a fee to post bonds.


I think I struck a nerve when we talked about the legality issue. He quickly gave me the marketing mantra of most, if not all, credit repair companies: i.e., we sell consulting services rather than credit repair services and credit repair services are a free secondary offering of our company.  Problem -- his website clearly markets their services as helping consumers to “raise your scores.”


What Now?


When I asked him what was next for his company given that FICO was altering its scoring model in an effort to combat “piggybacking,” he said that he is in the process of creating a similar service which will compensate consumers for adding another person to a credit card account as a joint cardholder. This, of course, would allow both cardholders to get credit for the account in their FICO scores.


The issue for the all parties: they’re in now bed with people they don’t even know and personally financially liable for any payments on the account. If the payments aren’t made, the credit reports and credit scores of everyone involved will suffer because the lender will attempt to collect the debt from ALL joint cardholders.


Considering the legal and financial ramifications, anyone who would knowingly choose to be involved with the credit card account of a complete stranger as a joint cardholder is playing with fire.


Note: Educational Services, and do not endorse any piggybacking credit repair services. We believe that consumers should earn good credit scores through solid credit management rather than buying their way onto the account of another – particularly someone they don’t know.

Message 1 of 6
Moderator Emeritus

Re: Interview with a 'piggybacking' website owner

I think we all saw this coming, it's just easy solution for this sleazy outfit to stay in business. You can be sure any and all new joint card holders with never have a card issued to them, let alone ever know the CC's account#.  
Message 2 of 6
Not applicable

Re: Interview with a 'piggybacking' website owner

fused111 wrote:
I think we all saw this coming, it's just easy solution for this sleazy outfit to stay in business. You can be sure any and all new joint card holders with never have a card issued to them, let alone ever know the CC's account#.

That has already been happened.
We'll never know what percent of all AUs were from "rental agencies" and what percent came from husbands and wives whose finances are already comingled. In the community property states--Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin--which includes 2 of the 3 most populous states, husbands and wives are legally responsible for one anothers debts, whether individual, joint or AU, but unless it's a joint account both spouses won't benefit on their CRs from that joint responsibility.
We do know, straight from the horse's mouth, that millions of people will be adversesly affected.
"a third of the 165 million consumers eligible for a FICO score have an authorized user on their account"
"Fair Isaac estimates 1.5 million to 3 million consumers will no longer have enough information in their credit report to be able to produce a FICO score."
This is little different from predatory lending whose goal is maximizing the number of subprime borrowers.

Message Edited by Noah_Bodie on 08-13-2007 09:27 PM
Message 3 of 6
Valued Contributor

Re: Interview with a 'piggybacking' website owner

In the short run, perhaps. In the long run, the goalposts will simply be moved...if this scoring change drops FICOs an average of 30 points, in a few months you'll only need to have a 650 FICO to get a loan that previously would have required a 680.
- - - -
in a credit-scoring postnuclear Stone Age...
Message 4 of 6
Not applicable

Re: Interview with a 'piggybacking' website owner

I'm a bit confused though. Will that idea even work? I thought to be added to a joint account, the person being added has to have a good enough score to be approved to be added. If a person is trying this whole 'piggyback' thing, obviously their score isn't THAT great to begin with....
If that is all true, the guy running this company must not know that much about the whole credit system, because I don't think his new master plan is going to work so well.
That what he should get to for ruining the AU system for everyone....
Message 5 of 6
Not applicable

Re: Interview with a 'piggybacking' website owner

Savings321 wrote:
Will that idea even work? I thought to be added to a joint account, the person being added has to have a good enough score to be approved to be added.

There's no way it's going to work. Credit rental agencies get by with what they do because an AU has very few rights and doesn't get the card. If an AU were to try and get a card issued to them, the primary cardholder will likely get an Email notification, and there's probably something in the agreement the AU renter signs that says "Try to get a card issued to you, and the deal is off."
With a joint account, as soon as it reports to your CRs, you'll have the account number and the name of the CCC.
Pick up the phone, call the number on your CRs, tell 'em, "Hi, my name is <insert your name here>, and my account number is <insert account number here>. You'll think I'm an idiot, I know. Go ahead and feel free to laugh. I just got my card in the mail, and I lost it. I feel like such a dope."
Then the rep is gonna say, "Oh, you'd be surprised at how often this happens. Don't feel bad. Now, let me confirm some information, I'll cancel the card to avoid any fraudulent activity, and get you a new card."
Message 6 of 6
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