Class is back in session. Lesson 1: how to protect college students
posted by Mike Burke on Thursday, August 5, 2021 in SHAZAM Blog
Learning life lessons at an early age is good, except when your bank account gets drained by a scammer and you learn the hard way.
Many students are starting their college career not knowing they are especially vulnerable to fraud.
One way fraudsters target students is through scholarship and financial aid scams. Many students jump at the opportunity to receive tuition financial aid, which is what scammers count on to take advantage of the situation.
Here are some common scholarship-related scams. Share this information with your accountholders so you can help college-bound students avoid them!
Fake scholarship sweepstakes
In this scam, fraudsters create an official-looking scholarship sweepstakes requiring money up- front to participate. Legitimate scholarship providers don’t want – or need – your money. They want to help students attend school, not earn a profit.
If a scholarship is asking any sort of fee to apply, it’s likely not a legitimate opportunity. In the end, victims usually write off the expense, thinking they simply didn’t win the scholarship. Learn more about how to identify a scam.
Application fee scholarships
Fake scholarships are a fraud where the scammer promises to provide guaranteed college scholarships, even going as far as creating an official-looking scholarship program. Most seek to get students and their families to pay money to the scammer upfront as part of an application fee, but some scams also involve identity theft.
During a typical scam, 5,000 to 10,000 applications and fees of $5 to $35 are received, a lucrative profit for the bad guys. What makes this scam doubly bad is the student has also provided their personally identifiable information (PII) on the fake application, opening themselves up to identity fraud — in addition to money theft once the fraudsters have the PII.
Check out the FTC’s website to learn more about scholarship award scams.
Student tax scams
Student tax scams generally involve a scammer reaching out via phone, text or email in an attempt to get students to click on a link and provide PII or pay money for a “university student fee.”
Scammers often spoof phone numbers from Washington, D.C. to impersonate the IRS. It’s important to note the IRS will never contact students or their families via email, text, social media, or phone. Official contact is through the mail.
Phishing emails are commonly used with subject lines like “tax refund payment” or “recalculation of your tax refund payment.” Scammers hope that students will click on these emails and enter personal information.
You can read more about student tax scams on the FTC website here.
Victim recourse when caught up in a scholarship award or student tax scam
Falling for any scam is incredibly stressful, especially for young college students. However, there are steps victims can take to recover lost funds and protect themselves in the future.
Students who fall victim should start by reporting the incident to the FTC on their website. Additionally, they should contact their financial institution’s fraud department to work on getting their funds back and charges reversed.
If their Social Security number has been compromised, go to IdentityTheft.gov to see what steps to take, including how to monitor their credit.
A good rule of thumb is to be skeptical about any scholarship that requires money upfront. Just one phone call to the university can help prevent the student from falling victim to a scholarship award scam. Use common sense throughout the process. If something ever seems sketchy, stop giving information and start asking questions.
SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.
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