Student Loan Scams: Protecting Yourself From Financial Fraud

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As lenders brace for federal student loan payments starting this fall, they’re facing an updated landscape that includes new payment plans, service changes and longer call waiting times. Another immediate concern: fraudsters are looking to steal the moment.

Student Loan Scams: Protecting Yourself From Financial Fraud

Clayton Lia Bratan, senior consultant at Truecaller, an app that blocks texting calls, says “Whenever there’s confusion in the market, that’s when scammers come into play.”

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Lenders need to protect themselves, as regulators crack down on fraudsters. In August, the Federal Trade Commission (FTC) busted a group of fraudsters who brought in nearly $8.8 million with false promises of “Biden loan forgiveness” in exchange for major bribes. The group claimed to be affiliated with the U.S. Department of Education and targeted borrowers through calls and text messages, the FTC said.

If you get an unsolicited call or text about your student loan, it’s probably a scam. Here’s how to spot and avoid student loan scams, and what to do if you think you’ve been scammed, according to experts.

Student loan scams vary widely, but they often have a few components. Here are some common red flags.

Liabraton said the scammers will use the word “Federal” in their communications. They may claim federal or state, or they may seek affiliation from the Department of Education or your student loan provider.

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“If you are a student loan borrower, you need to know that the federal government is not questioning you,” said Leslie Tan, a financial loan lawyer. “If it looks like a sales pitch with guarantees and promises, don’t from the federal government.”

If someone asks you to pay upfront or monthly to eliminate debt, it is a scam.

It’s always free to apply for or take advantage of any federal student loan assistance you qualify for, such as income repayment plans (IDR), borrower protection, public service loan forgiveness, and modifications – IDR account adjustment

And if you have questions about your loan or payment options, you can call your servicer for free guidance.

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If you get a call with promises of student loan assistance, beware. Most federal aid programs require at least ten years of payments to qualify, and no single company or individual has the power to negotiate a special deal with a lender or government. Education warned.

“Legitimate loan forgiveness programs have these strict eligibility criteria, so any type of emergency forgiveness is a red flag,” said Eli Armisen, director of programs at the Cybercrime Support Network. Scammers see an opportunity when people are nervous about making payments and try to position themselves as saviors, he said.

Student loan scammers can be creative in their communications. Here are a few things to consider.

If your phone is ringing from an unknown number, think twice. In the first half of September, scammers made more than 350,000 student loan robocalls, according to Financial Services, a financial infrastructure company.

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“Avoid unsolicited calls or communications,” Armisen said. “This is the first way a cheater will enter your life.”

Scammers can also send letters through the mail. Read them carefully. Whether it looks official or informal, fraudulent letters often contain grammatical or spelling errors, the Department of Education said.

In addition, scammers are also targeting borrowers through text and social media messages, Tayne said. The FTC said earlier this month that social media fraud will cost $2.7 billion in 2021, more than any other network.

If you get a call from somewhere about your student loans, don’t worry. If it’s an automated call, hang up; If someone is on the other side, end the call quickly.

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“If someone says they’re from an agency, department or lender, you just say, ‘You know what, let me wait and do my research and I’ll be on my way,'” Armisen said.

Use strong passwords and enable two-factor authentication on all your online accounts, including your StudentAid.Gov account and your student loan manager account, says LiaBraaten.

Never share your login information. With just a username and password, fraudsters can electronically sign student loan documents and make changes to federal student loan accounts.

If you think you have been targeted by a scammer, stop communicating with them immediately. Then follow these steps to get help and protect yourself from further harm:

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Report potential fraud to the FTC, which can use the report to identify trends, educate the public, and pursue fraudsters in cooperation with more than 2,800 law enforcement agencies.

If scammers take your money, the FTC will also give you tips on how to get it back. “The sooner you act, the better your chances of getting your money back,” the FTC website says.

You can also report student loan fraud to your state attorney general’s office or the Consumer Financial Protection Bureau for further assistance and investigation.

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As the White House application process opens, the FBI has released a new warning about student loan forgiveness scams. (There is a delay in processing applications after 8

“Fraudsters will do anything they can to take advantage of these types of opportunities,” said Jeff Taylor, head of commercial fraud research at Regions Bank. Protection.”

Common Signs You’re The Victim Of A Student Loan Forgiveness Scam Earnest Blog

Although the program requires you to apply in person, cybercriminals and scammers can offer student loan forgiveness assistance via phone, email and various text messages.

But if all else fails and you fall victim to student loan forgiveness fraud, the FBI recommends taking the following steps immediately:

“Our team of experts in the Regions is focused on fighting fraud every day, and the best way to do that is to make sure our customers are aware of the latest fraud,” said Kimberly Rees of the Regions Fraud Strategy Customer Experience Team. “Student loan forgiveness scams are just the latest example. But by knowing the risks, you can protect yourself, your family, and your financial future.

Our experts in the Regions are focused on fighting fraud every day, and the best way to do that is to make sure our customers are aware of the latest scams. Kimberly race of Customer Experience Strategic Areas

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The information presented is general practice and should not be considered legal, accounting or tax advice. Regions remind their customers that they need to be aware of fraud and security and are responsible for taking steps to protect their IT systems. Fraud prevention requires regular review of your policies and practices, as this risk is constantly evolving. There is no guarantee that any fraudulent transactions will be avoided or that there will be no associated financial losses. Visit Regions.com/STOPFRAUD or talk to a banker to learn more about how you can help stop fraud. A student loan forgiveness call, email or text that sets off the fraud sensor? Read on to learn how to spot and avoid student loan forgiveness scams and find out what to do if you think you’ve been scammed.

Scams come in all shapes and sizes, from phone calls and emails to text messages. You may find scams related to recent events. But sometimes it’s as simple as a false promise to work faster and save a lot of money. Remember: a scam doesn’t have to be elaborate or complicated.

If you need help with federal student loans, there are legitimate programs and resources.

You can work with your loan officer to find out which options are right for you, free of charge. But many companies will try to take advantage of borrowers by guaranteeing quick results or asking for money for services they cannot provide.

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While the US Department of Education may be contacted to highlight temporary programs, negative promotional language such as the above will not come from us or our partners.

Scammers often ask for upfront or monthly fees while promising to pay off student loans quickly and in full. Most government forgiveness programs require years of repayment and/or employment in certain fields before the loan can be forgiven.

The scammer may also ask for your account information, such as your FSA ID (username and password). This is red.