Is It Illegal to Make New Accounts for Discounts?

Making new accounts to grab a discount is usually not illegal by itself, but it can become a crime depending on what information you use and how much you take. Signing up with a second email to claim a welcome coupon almost always breaks the company’s rules; it rarely breaks a statute. The legal picture changes fast once fake names, someone else’s personal information, or real money enter the picture.

Breaking the Rules Is Not the Same as Breaking the Law

Nearly every online retailer, food delivery app, and subscription service limits each person to one account somewhere in its terms of service. Clicking “I agree” and then opening a second account is a breach of that contract. Breach of contract is a civil matter. The company can close your accounts, claw back any credits or discounts you received, and ban you from the platform. In most cases that is where the story ends.

A company can also sue in civil court to recover losses, asking for compensatory damages tied to the actual money the scheme cost it. In practice, businesses rarely bother suing an individual customer over a handful of promo codes. The math only works when the losses are large or the behavior fits a pattern the company wants to deter publicly.

When a Discount Trick Turns Into Fraud

Fraud requires an intentional misrepresentation of something material, made to deceive, that the victim relies on and loses something of value over. Feeding a company fabricated names, phony addresses, or fake payment details to manufacture accounts and extract discounts fits that definition. At that point the conduct stops being a rules problem and becomes something a prosecutor can work with.

Amount matters too. Every state sets its own dollar threshold for when theft or fraud becomes a felony rather than a misdemeanor. Those thresholds run from as low as $200 to as high as $2,500, with most states drawing the felony line somewhere between $1,000 and $1,500. Someone who games a system for $30 in food delivery credits is in a very different position than someone who systematically pulls thousands of dollars in promotional value across dozens of accounts.

Wire Fraud

Any scheme to defraud that uses internet communications can trigger federal wire fraud charges under 18 U.S.C. § 1343. Online account creation runs over the internet by definition, so a systematic discount fraud operation sits squarely within the statute. Wire fraud carries up to 20 years in federal prison.1Office of the Law Revision Counsel. 18 USC 1343 – Fraud by Wire, Radio, or Television

Federal prosecutors are not going to chase one reused promo code. Organized schemes with many accounts, significant dollar amounts, or resale of goods bought at fraudulent discounts can draw real attention. Wire fraud is one of the broadest tools in a federal prosecutor’s kit, and it reaches any deceptive scheme for financial gain carried out online.

Fake and Stolen Identities Change Everything

The sharpest escalation happens when new accounts are built on someone else’s personal information or on fabricated identities. The conduct stops being ordinary fraud and becomes an identity crime, which Congress has written much harder penalties for because real people are harmed when their information is misused.

Under 18 U.S.C. § 1028, producing or using false identification documents or misusing another person’s identifying information is a federal crime. Penalties scale with the conduct: using someone’s identity to obtain $1,000 or more in value within a single year carries up to 15 years in prison, and less serious offenses under the statute carry up to 5.2Office of the Law Revision Counsel. 18 USC 1028 – Fraud and Related Activity in Connection With Identification Documents, Authentication Features, and Information

On top of the sentence for the underlying fraud, anyone who uses another person’s identifying information during a felony faces a mandatory additional two years under the aggravated identity theft statute, 18 U.S.C. § 1028A. That two years runs consecutively, meaning it is added after the main sentence rather than served alongside it.3Office of the Law Revision Counsel. 18 USC 1028A – Aggravated Identity Theft

You do not need to steal a Social Security number for any of this to apply. Using a friend’s name and email to create a referral account without their knowledge counts. Buying stolen login credentials counts. Even inventing a wholly fictional person with fabricated details can fall under the identity document fraud provisions, because the statute reaches false identifying information created to carry out a scheme.

What About Hacking Laws?

The Computer Fraud and Abuse Act, 18 U.S.C. § 1030, makes it a crime to access a computer without authorization or to exceed authorized access and obtain information or anything of value. The obvious question: does breaking a site’s terms of service by opening extra accounts count as exceeding authorized access?

The Supreme Court answered that in 2021. In Van Buren v. United States, the Court held that “exceeding authorized access” means reaching parts of a system that are off-limits to you, not using authorized access for an improper purpose.4Supreme Court of the United States. Van Buren v. United States, 593 U.S. 374 (2021) After Van Buren, simply violating a website’s terms by creating extra accounts generally does not trigger CFAA liability on its own.

The analysis changes if someone bypasses technical access controls, uses automated tools to defeat security measures, or exploits system vulnerabilities to spin up accounts. Accessing a computer with the intent to defraud and obtaining more than $5,000 in value within a year carries up to five years under the CFAA.5Office of the Law Revision Counsel. 18 USC 1030 – Fraud and Related Activity in Connection With Computers

How Companies Catch Duplicate Accounts

Even with a different email and a different name, companies are good at linking accounts to the same person. Modern fraud detection platforms assign persistent device identifiers that survive clearing cookies, incognito mode, reinstalled apps, and in some cases factory resets. When the same device shows up behind two “different” accounts, the system flags it.

Browser and hardware signals build a digital fingerprint on top of that. Screen resolution, graphics card, operating system version, time zone, and browser configuration combine into an identifier that is hard to fake. Payment information, shipping addresses, IP addresses, and behavioral patterns fill in the rest. Platforms running anti-fraud systems often catch multi-account abuse within hours or days, not weeks.

What Happens if You Get Caught

Consequences follow a clear escalation. For a plain terms-of-service violation, expect every linked account to be terminated and any accumulated credits, rewards, or discounts to be revoked. A company that lost measurable money can sue for compensatory damages. Permanent bans tied to your device and payment methods are common, which makes it difficult to come back even with a legitimate account. If a company turns an unpaid balance over to a debt collector after reversing promotional pricing, that debt can eventually appear on your credit report.6Consumer Financial Protection Bureau. When Can a Debt Collector Report My Debt to a Credit Reporting Company?

When false identities or serious dollar amounts are involved, the criminal exposure is where the real weight sits. The specific charge depends on the facts, but the common federal statutes and their maximum penalties are:

State fraud and identity theft laws stack on top of these federal statutes. Most people who open a second account for a $10 welcome coupon will never face criminal charges. The people who build it into a system, run dozens of accounts, use fake identities, or resell goods bought with fraudulent discounts are doing something that carries real prison time. The line between a harmless trick and a federal felony is thinner than most people assume, and it is drawn by the methods you use and the amounts involved.