If a stranger waives your student loan, hang up

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Student loan scammers have a brand new catch: “Biden Student Loaning” or “Stimulus Forgiving”. Behind the field is the same …

Student loan scammers have a brand new catch: “Biden Student Loaning” or “Stimulus Forgiving”.

Hidden behind the playing field is the same old scammers’ playbook that persuades federal borrowers to pay for services they could get for free or to give away personal account information in exchange for forgiveness.

The prolonged hiatus in federal student loan payments and the resurrected talks in Congress about debt relief make such deceptions easier to believe.

“Debt relief scams pile up when there is great financial hardship or great confusion, and we have both of them underway,” said Persis Yu, an attorney for the National Consumer Law Center and director of the Student Loan Relief Project.

To be clear, there is no new broad-based lending program beyond the existing, often hard-to-get options, such as: Also, no application or fee is required to receive the federal student loan payment hiatus, which has been in effect since March 13, 2020 and continues through September 30, 2021.

ABOUT THIS ‘STIMULATION’

It is safe to say no to any unexpected offer of debt relief, loan consolidation, or modification of your repayment plan as a scam.

“There is no person or entity in the world that can offer you a better deal on your student loan or access a program that you cannot obtain yourself by working directly with your servicer,” said Betsy Mayotte, President and Founder from the Institute for Student Loan Advisors.

Mayotte says she has seen a surge in borrower complaints about “Biden Facilitations” and COVID-19 student loan fraud.

In one case, a borrower sent Mayotte a transcript of a fraudulent voicemail that made a tempting offer: “It looks like your student loan is eligible for recent stimulus giving and relaxation laws, but your application needs to be completed.”

The caller sounded genuine (she provided a name and agent ID number) and expressed the urgency to call back through a “dedicated authorization line”. Then the caller added further time sensitivity, saying the layoff would come first, first serve.

“It is interesting that this number was introduced as a DC number, which certainly gives your fraud even more credibility,” says Mayotte.

Borrowers should remain vigilant as student loan fraud spreads, largely due to the “whack-a-mole” effect: as soon as one company closes, another pops up in its place, says Michelle Grajales, recruiter at the Federal Trade Commission’s Consumer Protection Agency.

RED FLAGS TO WATCH OUT FOR

The maxim “If it sounds too good to be true, it is too” goes hand in hand with exposing scams.

But the most effective ones often mix fact and fiction, Grajales says. Tactics like using current phrases or claiming you work for the federal government make false promises more attractive to financially vulnerable people.

“You heard about lending,” says Grajales. “You heard about the CARES law. Scammers try to sound legitimate by throwing in words that are very good in public. ”

The basic structure of student loan fraud has stayed the same for years, Yu says: companies promise some kind of waiver in a short amount of time, collect and collect a high upfront fee, then gain access to a borrower account to consolidate their debts and enroll them in an income-based repayment plan .

“If they do anything at all (with the debt), they mostly do it, or they just take the borrower’s money,” says Yu.

Experts say it is important to avoid giving up cash or your FSA ID which allows scammers to act on your behalf.

“You put yourself between you and your servicer,” says Scott Buchanan, executive director of the Student Loan Servicing Alliance. “They often change your mailing address or email address so that all servicer communication goes to these scammers. Then if they don’t do what they’re supposed to, you won’t know until it’s too late. “

Use caution if a company expresses the urgency to “apply now” or offers to offer a service that you could do yourself, such as:

When in doubt, contact your servicer directly using a phone number on their website – not a number given to you by a third party.

WHAT TO DO IF YOU ARE AFFECTED

If you have been scammed, remember that you will not be the first student loan borrower to be a victim of predatory tactics.

“It has nothing to do with how smart you are; it has more to do with how good they are at their vertigo and how vulnerable you are when they reach you, ”Mayotte says.

Regaining control of your account is the most important first step you should take, according to experts. Here’s how:

– Disconnect all links with the scammer.

– Contact your servicer to report the account break. You may need to request a new FSA ID.

– Check the contact information in your account and make sure that all ongoing correspondence goes to you.

– Contact your bank to stop all automatic payments to the scammer.

– Freeze your balance.

– Ask for legal assistance to get your money back.

– Report the fraud to law enforcement agencies.

HOW TO COMPLAIN ABOUT A FRAUD

You can and should report any fraudulent correspondence to multiple sources. The more complaints these agencies receive, the more ammunition they need to have in order to take legal action against fraudsters. Scams can be reported and prosecuted by:

– Your federal student loan service provider.

– The Federal Trade Commission.

– The consumer protection office.

– Your prosecutor.

– The US Department of Education’s FSA Feedback Center.

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This article was made available to The Associated Press by the NerdWallet personal finance website. Anna Helhoski is a writer at NerdWallet. Email: [email protected] Twitter: @AnnaHelhoski.

SIMILAR LINKS:

NerdWallet: How to Avoid Covid-19 Student Loan Facilitation Scam http://bit.ly/nerdwallet-avoid-student-scam

Federal Trade Commission: Report Fraud https://reportfraud.ftc.gov/

US Department of Education: FSA Feedback Center https://studentaid.gov/feedback-center/

Copyright © 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, written, or redistributed.

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