A file segregation scam is where a debtor, usually someone who has recently filed bankruptcy, is offered a brand new credit identity in exchange for a fee--usually a very large fee.
How Credit File Segregation Scams Work
The scammer usually targets those who have filed bankruptcy or who have delinquent credit cards or loans in default on their credit report. The scammer attempts to convince the target that because they filed bankruptcy they won't be able to get any loans or credit cards for ten years. This is false.
Although a bankruptcy filing will remain on a debtor's credit report for 10 years, a debtor who files bankruptcy is usually able to obtain unsecured credit within a couple of years after their bankruptcy discharge.
But of course many debtors don't know the facts about bankruptcy and fall for these scammers' lies. After the debtor is convinced that he/she is locked out of credit access for 10 years, he/she is ripe for the file segregation scam. The scammer then offers a brand new social security number and convinces the victim to apply for loans and credit cards using the new social security number. Unfortunately, by following the scammers "advice" the victim is committing a crime. It is illegal to create a new credit identity and doing so could land you in legal trouble.