As we begin to think about the end of summer and head back towards the halls of academia, fraudsters are also preparing for the new school year with innovative ways to take advantage of unsuspecting individuals. The scams we see during this time of year are targeted towards both students and parents.
“Fraudsters are always on the hunt for a new opportunity to conduct a scam,” says Tracy Swaim, South State’s Fraud Investigation Supervisor. “Protecting our customers is our top priority, and it’s important to remain vigilant and aware of industry trends. South State’s Fraud team is here to help by outlining some of the most prevalent back-to-school scams.”
One common scam that occurs as students consider their academic futures is the diploma scam. This scam occurs when a fraudster convinces a student to pay for a “diploma,” the student or parent provides payment information, and the fraudster steals and misuses this information.
Diploma Scam Red Flags:
- Someone approaches a student regarding paying for a diploma.
- The diploma can be earned “quickly” with little to no coursework.
- The program offers credits for “life experience” without coursework or testing.
- Educational programs claiming to be affiliated with the Unites States Government are often scams, as educational requirements are usually affiliated with state requirements.
As school begins, we often see individuals falling victim to the student tax scam, which is related to the IRS tax scam.
Student Tax Scam Red Flags:
- A student receives a call stating he or she improperly filled out a form for enrollment or tuition assistance and that, because of the error, the student completed his or her taxes incorrectly and owes money to the IRS.
- The fraudster says the student cannot attend class, or the student will face fines or imprisonment if the “taxes” are not paid immediately.
Keep in mind, the IRS will not initiate contact via telephone; they will always mail a letter first. Additionally, every government action has an appeal process. If the contacting party wants immediate payment without offering the opportunity to appeal or an official review of accounts owed, this is a scam.
In these scams, fraudsters often ask for payment via wire or gift cards. The IRS will never require payments via gift cards or wire transfer. You can learn more about the IRS at www.IRS.gov.
Scholarship scams are also prevalent this time of year, as fraudsters know students and parents are budgeting to pay for schooling and related expenses.
Scholarship Scam Red Flags:
- Applicants are never asked for payment information when applying for student loans of financial aid. If asked for payment information during the application, the application could be a scam.
- If an organization claims to guarantee funding upon completion of an application, it could be a scam.
- If the organization asks the applicant to pay an application fee or taxes in order to receive the scholarship, it could be a scam.
Keep these red flags in mind as we approach the beginning of the new school year. If you think you’ve fallen victim to a scam, please contact us immediately.