OMAHA, Neb. — There is a myth regarding those who typically fall victim to scammers: Many believe older Americans are most frequently scammed when the reality is that young adults are more likely to be duped. Research by both the Better Business Bureau (BBB) and the Federal Trade Commission (FTC) reveals that a startling 44 percent of those aged 20-29 have lost money to fraud. For those aged 70-79, the figure is 20 percent. Student loan forgiveness is one of the more frequent scams targeting young adults.
“Given that the current COVID-19 pause in federal student loan payments will end on Oct. 1, we expect to see an uptick in scam activity,” said BBB Regional CEO Jim Hegarty.
Scammers are likely to bombard loan holders with rip-offs that claim to offer “free extended forbearance!” and fictional “President Biden loan forgiveness plans!” The object of these scams is to steal young adults’ money and/or their identities.
How to identify a student loan scam
Tricksters, thieves and crooks are trying to worm their way into the student loan repayment process. Weed out the scammers by remembering these warning signs:
• Upfront fees — Never agree to these. It is, in fact, illegal to charge an upfront fee for the service of lowering federal student loan payments or reducing student loan debt.
• Promised loan forgiveness or cancellation — No one can make such promises. Student loan debt relief companies don’t have the ability to so much as negotiate with a federal loan servicer.
• Unsolicited calls and emails — These are never legitimate. Government agencies and businesses will not and cannot call without permission.
• Spelling and grammatical errors — Put that college education to work and read communications carefully for such mistakes. They are signals of scam attempts — especially common is unusual capitalization.
• “Act now!” and “limited offer!” claims — Crooks will try to cite “new laws” or other nonsense to goad unsuspecting victims into responding immediately. All scammers want their victims to act quickly before fully engaging their brains. Be deliberate and ignore such attempts.
• Robocalls — These are fake and should never be responded to.
• Person making contact asks for personal information — Never give up such information to a stranger. Especially desired by thieves is a person’s FSA ID username and password. Don’t give this out or allow someone to create one; it’s all they need to make any desired change to an account. The same holds true for Social Security numbers and banking information.
Be sure to research any potential business partner at bbb.org for Business Profiles. Remember to do an online search as well, entering the company name and words like “complaints,” and “reviews.” A third-party isn’t necessary to apply for loan deferments, forbearance, repayment and forgiveness through the U.S. Department of Education. It’s free. Why put a middleman into the equation?
If you’ve been the victim of a similar scam, report it to BBB Scam Tracker. Your firsthand experience can help others recognize scammers’ tactics before it’s too late!