Trying to pay off student loans can be a burdensome endeavor.
So when a call, email or letter suddenly appears offering help, it can seem like a much-needed miracle. Pitches for student debt relief services can seem to good to be true, and state officials are warning that often times they are.
The state Department of Banking Securities and Department of Education has issued a warning that there has been a recent surge in student loan forgiveness scams.
Officials from the departments say that the financial strife caused by the COVID-19 pandemic has created an environment ripe for scammers to take advantage of those struggling to pay off debt.
“With the continuing pandemic, many consumers have been in search of financial relief,” Secretary of Banking and Securities Richard Vague said. “Like other scams, these perpetrators prey upon the hope and vulnerability of people, creating an ideal scenario to take advantage of them.”
Scammers are using the attention that student debt has recently received — public calls for debt forgiveness, a pandemic-related pause in loan payments — and the confusion over the changing landscape of student debt to trick people.
Officials said anyone who is contacted about student loan forgiveness should confirm that it’s legitimate before providing any personal information. Some tips on telling scams from the real thing include:
- Being skeptical. Scammers often obtain student loan information illegally. Just because someone has information about your loans, doesn’t mean they are to be trusted.
- Researching the company. Check the validity of the company contacting you since many “companies” run by scammers do not actually exist.
- Doing your due diligence. Check what program is being offered to you. Some scams offer to enroll you in programs like the “CARES Act loan forgiveness” or the “Biden forgiveness program,” neither of which exist.
- Verifying email addresses. Ensure that emails being sent to you about your student loans are from a .gov email address.
- Being aware of what legitimate programs will and won’t ask you for. Proceed with caution before sharing any of your sensitive or financial information like a Social Security Number or credit and bank information. If in doubt, hang up and call your servicer directly.
- Pausing before taking action. Confirm any correspondence or calls with your servicer before taking any action.
Officials say that anyone who feels they have been a victim of a student loan forgiveness scam should:
- Close accounts or stop payment. If you shared your bank account or credit card information with a scammer, contact your bank or credit card company immediately to close your accounts or stop payments.
- Alert your servicer. If you suspect you’ve been the victim of a student loan forgiveness scam, call your servicer so that they can monitor your account.
- Monitor your credit report. Check for suspicious activity. Scammers don’t always use your information right away. It can be weeks, months, or even years before your information is used for fraudulent activity. You might also consider freezing your credit in an abundance of caution.
- Report the scam. You can report a student loan forgiveness scam to the Federal Trade Commission at reportfraud.ftc.gov/#/ or Pennsylvania Attorney General at attorneygeneral.gov/submit-a-complaint.
For more information or to file a complaint about financial transactions, companies or products call the Department of Banking Securities at 800-722-2657.
Source: Berkshire mont