There are several scams that fraudsters use to try and make money illegally. College students are often vulnerable to certain scams based on their situation and perceived understanding of finances. Listed below are popular scams targeting this demographic and ways to avoid becoming a victim.
Scammers will call students heading back to school and demand that they pay a Federal Student Tax – a tax that does not exist. These scammers are impersonating an agent from the IRS asking for money over the phone. The impersonators will persuade students to wire them money while they’re speaking to cover the “tax.”
Using this urgency tactic, many scammers may get aggressive and even threaten to get law enforcement involved.
To keep yourself from becoming a victim, make sure to never give out your personal information and end these suspicious calls immediately.
Beyond the Federal Student Tax scam, fraudsters conduct other more generic “IRS tax bill” scams. Posing as the IRS or law enforcement working on behalf of the IRS, the scammer will demand payment over the phone. The calls sound very serious and urgent, but just remember that the IRS will never call you about a tax bill. They will always mail you a bill first and give you options of how to pay.
Another way that fraudsters target college students is through fake employment scams. Scammers will post job openings for an administrative position. However, the job that the student will actually be doing is cashing fraudulent checks for the “business.”
If you agree to work for them, these companies will send checks that you must cash yourself, agreeing to then mail a portion of that money back to the company. This is a scam that can have major consequences. The account that you use to try and cash those checks could be flagged and closed for attempting to cash fake checks. You could also be held liable to repay the money that was fraudulently received and possibly face additional legal consequences for permitting your account to be used for fraudulent purposes.
These employment scams go after college students who are looking for ways to make money. To keep yourself and your money safe, there are some ways to ensure that the job you’re considering is legitimate.
For starters, the position or title will be able to tell you a lot about the job. Things like “mystery shopper,” “work from home” or “caregiver” are easy to use because they’re so vague. These titles are frequently manipulated by scammers. Before applying to a job with a title like this, make sure you’re able to get more details and verify the company information to make sure it’s a legitimate position.
During or after the process of applying for a job, it’s important to be cautious. Some scammers are just trying to collect information such as Social Security numbers and will instantly offer you a job. To protect yourself, be careful of jobs that offer you a position without an interview or conversation over the phone. It’s suspicious for a company to not want to speak with or meet a candidate – even if you are extremely qualified. Other scammers will require you to pay to apply or accept a job offer. This should raise a major red flag.
No matter what the job description says, do your research online by looking up the names and companies involved in the offer. A few minutes of research can help protect you from giving personal information or money to scammers.
College students are also often the targets of romance scams. One common way that this occurs is when a fraudster uses an online dating site or app to convince an individual that they’ve fallen in love with them. They usually say that they’re living in another country and need money to come to the United States or get out of trouble. Once the money is sent, typically via wire transfer, to the fraudster, they disappear, leaving their target out of luck. Another way a romance scam can occur is by a fraudster telling their victim that they want to be in a relationship and will take care of them financially. However, often, the catch is that they need access to the individual’s financial accounts to deposit cash. Once they have access to a financial account, the fraudster will withdraw money instead of depositing it. An additional scenario includes the fraudster asking their target to deposit a check for them and sending the cash via wire transfer or using it to purchase and send gift cards. The checks often turn out to be fake, leaving the victim in trouble with their financial institution and out of the cash they’ve sent, whether it was wired or tied up in gift cards that are hard to track.
Another method that fraudsters use to target college students is through advance fee scams. Most commonly, this scam involves a fake student loan company offering students a better or lower interest rate on their student loans. The catch, however, is that to get these better rates, an upfront fee is required. Typically, this fraudulent fee can be substantial.
There is no legitimate loan provider that will make you pay a fee upfront for any service they offer. In this scam, once a person pays these fees, the companies end up never issuing a loan or giving a better rate.
There are ways you can recognize ads and offers from these fraudulent loan companies. Advance fee loans will sometimes feature a 900 telephone number which will charge your phone bill just for calling. Legitimate companies will not have this type of phone number. Advance fee scams may also claim that they can 100% guarantee a loan for someone. This is never true, as most loans depend on key factors such as your credit and income history.
If you fall victim to this or any other scam, there are organizations that you can contact to help deal with this situation. The Better Business Bureau and Federal Trade Commission will both accept complaints regarding scams and help you report the companies using them.
If you’ve given account information to someone as a result of one these scams (or others), be sure to contact your financial institution immediately so they can close the affected account or give you a new account number.
Visit our WalletWorks page for more tips to keep your money safe.