When student loans weigh heavily on many, news of relief is often met with both hope and skepticism. Unfortunately, for over 27,000 borrowers, hope turned into despair as they fell prey to a scam that promised relief but delivered only financial ruin. The Federal Trade Commission (FTC) recently announced that it’s sending over $4.1 million in refunds to student loan borrowers who were deceived by scammers.
The perpetrators of this deceitful scheme found themselves at the center of an FTC complaint filed in 2019. The scam was as cunning as it was heartless. They promised to lower monthly student loan payments and offered to take over loan servicing, all while siphoning off hundreds to thousands of dollars in illegal upfront fees from unsuspecting borrowers.
Instead of easing the financial burden, these scammers exacerbated it. The FTC revealed that only a fraction of the payments made by borrowers was actually applied to their loans, if any at all. The rest was pocketed by the fraudulent operators, leaving borrowers not only out of pocket but deeper in debt.
As anticipated, it’s sadly predictable that scammers will also target those receiving these refunds. Scammers are often quick to exploit the confusion and desperation of borrowers.
The warning signs are clear. Unsolicited calls or emails pressuring borrowers to ‘act immediately,’ promises of being ‘flagged for forgiveness,’ or programs claiming to be ‘first come, first served’ should all raise red flags. In an era where information is abundant, but trust is scarce, borrowers must exercise caution and diligence.
The Education Department’s website stands as a beacon of reliable guidance amidst the sea of misinformation. Detailed resources on federal student loan forgiveness programs offer borrowers a roadmap to navigating the complex terrain of student loan relief.
We firmly believe that no one is immune to falling for a scam. Regardless of someone’s socioeconomic status or level of education, they can still be targeted. Every individual is vulnerable to scams; there’s no exception.
If there was to be an exception, it should be a renowned and successful financial advice columnist. But even someone in such a position can fall prey to a scam if placed under sufficient pressure from the scammer.
It’s unfortunate but not uncommon for even those well-versed in finance to fall victim to scams. Take Charlotte Cowles, a financial advice columnist for The Cut, a division of New York Magazine, for example. Last Halloween, she received a call from someone posing as an Amazon customer service representative. They claimed she had made an $8000 purchase of Apple products, which she hadn’t. Ms. Cowles wisely checked her Amazon account, finding no such transactions. However, the scammer had a response ready, alleging that a business account was opened in her name. Despite her vigilance, Ms. Cowles was convinced her identity had been compromised.
Continuing the conversation, the fake Amazon representative exploited the situation further, claiming that the company was facing widespread issues with identity theft among its customers. To add credibility, they mentioned having a liaison within the Federal Trade Commission (FTC). Ms. Cowles, concerned about the apparent threat to her identity, agreed to be connected to the supposed FTC agent.
The deceptive FTC impostor already possessed personal details about Ms. Cowles, including the last four digits of her Social Security number, her home address, and her date of birth. With such sensitive information in hand, it’s understandable why a victim might be inclined to trust the fraudulent claims being made. This level of sophistication can make the scam appear legitimate and increase the victim’s susceptibility to manipulation.
In addition to the personal details already disclosed, the counterfeit FTC representative went on to fabricate a dire scenario, claiming that numerous bank accounts, vehicles, and properties were registered under Ms. Cowles’ name. Adding to the distressing narrative, they alleged that a car linked to her identity had been discovered near the Texas-Mexico border, rented in her name, and found containing illicit drugs. These false claims likely intensified Ms. Cowles’ sense of urgency and fear, further blurring the line between truth and deception.
The deceitful tactics didn’t stop there. Ms. Cowles was informed by the scammer that arrest warrants had been issued against her in multiple states, accusing her of serious crimes such as drug trafficking and money laundering.
To further isolate their victim and maintain control, the fraudulent FTC agent instructed Ms. Cowles not to disclose the situation to anyone, cautioning her that anyone she confided in could potentially be a suspect in the fabricated crimes.
Despite the fraudulent claims and attempts to exploit her, Ms. Cowles was led to believe that the FTC was there to safeguard her finances. When asked how much money she would require to sustain herself for a year, she stated $50,000. Shockingly, the impostor instructed her to withdraw this amount in cash from her bank and assured her that it would be collected from her residence by a supposed CIA agent. Even during the withdrawal process, there were warnings. The bank teller, sensing something amiss, cautioned Ms. Cowles about potential scams associated with large cash withdrawals.
Under the false pretext of protecting her identity, Ms. Cowles was instructed to hand over the withdrawn cash to the supposed CIA agent, who would then allegedly provide her with a new government check issued under a new Social Security number.
As instructed, Ms. Cowles handed over the box containing the $50,000 to the driver of an SUV with tinted windows that pulled up to her residence.
Ms. Cowles’s experience highlights the profound emotional toll inflicted by falling victim to scammers. In her account, she vividly expresses the overwhelming sense of shame that washed over her upon realizing she had been deceived. This aspect is crucial because it underscores the psychological impact that financial scams can have on individuals, often extending far beyond the immediate financial loss. The shame and self-blame experienced by victims like Ms. Cowles serve as a poignant reminder of the need for compassion and support for those who have been targeted by fraudsters.
We urge you to take the time to read Ms. Cowles’s comprehensive narrative of the scam in her latest column.
Ms. Cowles’s account serves as a powerful reminder that no one is immune to the threat of scams. Regardless of our education, background, or financial status, we are all susceptible to being deceived. By sharing her experience, she highlights the importance of remaining vigilant and informed in the face of evolving tactics employed by fraudsters. Let her story be a call to action for all of us to educate ourselves, support one another, and work together to combat the scourge of scams in our communities.
AI-generated voice cloning, or voice spoofing, scams have become such a nuisance, the federal government is turning to the people to help solve the problem. If you’re unfamiliar with AI-voice generation technology, there are apps and programs that can take a short sample of anyone’s voice and make that voice say whatever you want it to. The benefit of it is it can give people who lost their speaking ability a voice. However, every tool that’s made for the good of mankind can also be used to its detriment.
Scammers use cloned voices in what are known as emergency scams. Emergency scams can be broken down into two categories, for the most part, the grandparent scam, and the virtual kidnapping scam. In both sets of scams, the scammers need to convince their victim one of the victim’s loved ones is in some sort of peril. In the case of the grandparent scam, the scammer will try to convince the victim their loved one is in jail and needs bail money. While in the virtual kidnapping scam, the scammers try to convince the victim their loved one has been kidnapped for ransom.
Scammers will take a sample of someone’s voice, typically from a video that’s been posted to social media. Then, they’ll use the voice cloning technology to make it sound like that person is in a situation that requires the victim to send money.
Voice cloning has become such a problem, the Federal Trade Commission has issued a challenge to anyone who thinks they can develop some kind of voice cloning detector. The top prize winner can receive $25,000, the runner-up can get $4000, while three honorable mentions can get $2000.
In their own words, the FTC has issued this challenge to help push forward ideas to mitigate risks upstream—shielding consumers, creative professionals, and small businesses against the harms of voice cloning before the harm reaches a consumer.
The online submission portal can be found at this link, and submissions will be accepted from January 2 to 12, 2024.
Hopefully, someone can come up with the right idea to better help consumers from losing their money to these scammers.
We’ve said in the past that if you’ve been scammed once, the odds are pretty good that you’ll be targeted by scammers again. Except, it doesn’t typically happen in one day. That’s what happened to one Texas senior who not only lost $75,000 to scammers, but they continued to plague her afterwards.
It all started when she received a call from someone offering to install an antivirus program on her computer. The victim says she needed this for her computer, but in order to do so, the caller needed remote access to her computer. Right off the bat, the scammers are starting with the tech support scam. If the scammers aren’t saying they’re installing software, they’re telling you that you have a virus on your computer. Once scammers have access to a victim’s device, there’s an untold amount of havoc that can be wreaked using the victim’s personal information.
But getting back to the story, the woman then received a message on her computer that said her Amazon account had been hacked, and she needed to call the listed phone number. Now, the scammers are following up with the Amazon scam. This is where scammers claim to be from Amazon and that there is something wrong with your account. This is done to either get your payment information, or the scammers will try to convince you that you need to ‘move your money’ to avoid being hacked.
While on the phone with the fake Amazon representative, the victim was then told she was being transferred to the Federal Trade Commission. Not only did the scammers pretend to be with the FTC, but they pretended to be the current FTC chairwoman. This is what’s known as the government impersonation scam. Scammers will pose as anyone from local police to the chairs of federal commissions if they think they can intimidate their victims. Unfortunately, this is not the first instance we’ve seen of scammers posing as high-ranking government officials.
The phony FTC chairwoman threatened the victim with arrest if she didn’t comply with her demands. The victim was told that someone was selling drugs and laundering money through her bank account. To ‘clean’ her money, the victim would need to wire it to the scammers posing as FBI agents.
Again, when someone who is not familiar with how online activity works, it can be quite easy to fall for such a scam. However, there are tips to keep you or a relative safe. The first is not to allow anyone you don’t know personally to install software on your device, or give them remote access. Anyone calling to offer software is more than likely a scammer. Also, if your computer runs Windows 10 or 11, they have built-in security software already.
If Amazon is calling or your device says you need to call them, it’s a scam. Amazon, or any other company, does not know the status of your device, nor do they know your banking activity. If any company besides your bank says there’s a problem with your bank account, they’re probably trying to scam you.
Lastly, no legitimate government agency or law enforcement branch is going to threaten you with arrest over the phone. Neither will they ever ask you to move your money to ‘clean’ it, whatever that means.
A woman from Rochester, Minnesota, recently lost thousands of dollars to scammers. It started when the woman received a robocall that claimed to be from Amazon. The recording said that she had been charged for several Amazon purchases, and to press 1 if she did not make them. After she pressed 1, someone claiming to be an Amazon representative spoke to her. The caller said that they would speak to her bank about the charges.
Not too long after that call, the woman received another call from someone claiming to be with the Federal Trade Commission. This caller told her that her identity had been stolen. The caller told the woman to protect her money, she would need to withdraw the money from her bank account. However, she was told not to contact police, or she could be accused of money laundering. She was then instructed to deposit the money into a Bitcoin ATM that was at a gas station. The victim lost $7,000 in total.
This scam has a lot of moving parts, but each one is a red flag if you know what to look for. For example, Amazon does not call customers about fraudulent charges. Even on Amazon’s own help page, they say that if you received any communication about a charge you didn’t make, it likely didn’t come from Amazon. If you receive any communication like this, first check your Amazon account for any fraudulent charges. If there are any fraudulent charges, you can dispute them with Amazon, but you need to make first contact. Amazon will not call you.
While the FTC is a branch of the Department of Justice, they typically do not call consumers to let them know they’ve been a victim of identity theft. Unfortunately, identity theft is usually only detected by the victim and not law enforcement. Also, no government or law enforcement agency will ever call you and threaten you with arrest while supposedly trying to assist you. If someone tells you to not contact the police, your best bet is to contact the police immediately.
Lastly, no government entity is going to ask you to move your money to Bitcoin, especially if the Bitcoin ATM is at a gas station. While cryptocurrencies may have gained a modicum of mainstream acceptance, it’s nowhere near the point where the government is using it as a consumer protection platform.
Recently, the Federal Trade Commission (FTC) has warned consumers they’ve seen a rise in scammers using cryptocurrencies like Bitcoin. Traditionally, scammers usually lean toward trying to collect money from their victims through means like gift cards and money transfers. That’s because gift cards and money transfers are things that most people understand. Meanwhile, if you say cryptocurrency to most consumers, you’ll get a puzzled look. However, the FTC says that scammers have come up with a new and easy way to get victims to pay in cryptocurrency.
According to the FTC, scammers are now getting their victims to scan QR Codes with their phones. Once a victim scams the QR Code with their phone, the victim just paid the scammer in cryptocurrency. Fortunately, there’s a process that needs to take place before scanning the code that should tip you off that you’re being scammed. The FTC warning states that the scammers will try to get you to go to a Bitcoin ATM, to scan the code. In other instances, the scammers will try to get you to move money out of your bank before getting you to scan the code.
For example, a man from Athens, Georgia, was recently taken for $45,000 in a tech support scam. A computer pop-up told him his computer had been infected with a virus, and he needed to call Microsoft at a number listed on the pop-up. The scammers told him his computer and phone had been compromised, and he needed to move his money to a cryptocurrency account to protect it. After he moved his money, the scammers gave him a QR code to scan. Once the victim did that, his money was gone, having been transferred to the scammer.
In most consumer cases, cryptocurrency should be treated just like gift cards. The vast majority of businesses and agencies do not ask for payment in Bitcoin or any other cryptocurrency. While cryptocurrency is not untraceable, it is extremely difficult to get back once it’s been sent from one crypto wallet to another. Bitcoin and other cryptocurrencies are still only used in niche circles, despite what its more vocal proponents will tell you.
So, if someone contacts you and asks for payment in Bitcoin, it’s more than likely a scam.
It’s not often that we have good news for readers, but today we have some good news.
Often, we like to remind our readers that gift cards are the currency of scammers due to the ease in which scammers can empty the funds from gift cards. Prior to the rise in popularity of gift cards, money transfer services like Western Union and MoneyGram were the tool of choice for scammers to take money from their victims. These services are still used by scammers because a scammer can just walk up to a money transfer county, get their money, and disappear. That and the fact money can be transferred just about anywhere in the world.
On June 1st, the Federal Trade Commission announced that victims of MoneyGram scams can claim their portion of a $125 million settlement MoneyGram made with the DOJ. However, there are some requirements before you can file for your claim. You have had to have been a victim of a scam that used MoneyGram between Jan. 1, 2013 and Dec. 31, 2017. Then you can go to the MoneyGram Remission Website and start your claim. However, you don’t have too long to file a claim as the deadline for filing a claim is Aug. 31, 2021.
Money transfer services should only be used if you need to send cash to someone you know personally, and you’re 100% sure that they’ll be receiving the money. If not, then there is a good chance you’re sending money to a scammer.
The Federal Trade Commission recently released a report that said that Americans lost a total of around $304 million to romance scams in 2020. That’s a 50% increase since 2019. For the third year in a row, romance scams were listed as the number one scam that was reported to the FTC. The actual amount of money lost is probably even higher since many victims are too embarrassed to ever come forward. The pandemic was cited as the main reason why there was such a spike in romance scam activity. Seniors over 70 lost a median amount of close to $10,000 each while people in their 20s saw the biggest increase in d=falling for these scams.
However, we’re getting a little ahead of ourselves. While most of our readers already know what a romance scam is, it doesn’t hurt to explain it to new readers. A romance scam is when a victim meets someone online who isn’t who they say they are. The scammers will often use the photo of someone they found online, often a member of the military but not always. The scammer will lead the victim to believe that they are in some kind of romantic relationship, but the scammer will keep making excuses as to why they can’t meet in public. Usually, the scammer will say they’re either deployed overseas or they’re working out of the country. Before too long, the scammer will start asking the victim for money. In some cases the money will be or gifts, or the scammer will claim they need the money for some kind of emergency. The scammers will keep asking for money until the victim realizes they’re being scammed. The scam has been known to find victims in both men and women.
In a lot of romance scams, it’s often hard for the victim to believe they’re being scammed. There have been cases where the victim got into legal trouble after stealing money to send to their fictitious romantic partner. As a friend or family member, it may be up to you to do the detective work for them. Do a reverse image search of the photo being used by the scammer. You’ll often find that the picture was stolen from someone with a completely different identity. Also do a search for the job the scammer is claiming to have and include the word ‘scammer’ in the search.
If you feel like someone you know might be the victim of a romance scam, please let them know before it’s too late.
The Federal Trade Commission is usually the office of the government that deals with online scammers and returns money to victims. Ironically, the FTC has issued a warning about a website that is impersonating them to scam consumers.
The scam website claims to be the U.S. Trading Commission. There is no such division of the U.S. Government, but the site fake uses the FTC’s seal and street address. The site claims that it is distributing a ‘personal data protection fund’ to victims of identity theft. It promises that you can receive money instantly on top of it.
If you click on the link to obtain the money, you’re asked for your banking information, so you can receive the payment. Of course, this is just a ruse to gain access to your bank account, so the scammers can drain it. The FTC also says there’s a potential chance that going to the phony site could download malware to your device. Scammers could not only gain access to your personal information this way, but they could also spread the malware to people in your contacts list.
Surprisingly, this phony website has claimed victims from all over the world and not just the US.
If you were a victim of a scam that the FTC reclaimed money from, they would send you a check in the mail. They would not have a link that anybody could click on to try to claim money. The FTC would also not ask for personal identifying information like bank account information, credit card number, or Social Security number before they could deliver their payment.
If you come across a phony FTC lookalike site, you’re asked to please report it to the FTC at ReportFraud.ftc.gov.
With the second round of economic impacts in the process of being paid and a third round possibly on the horizon, you might think that taxpayers should now be pretty immune to stimulus scams. However, that hasn’t stopped scammers from trying to get their hands on yours. It also appears that the scams are becoming even more elaborate to try to steal from you.
The Federal Trade Commission is warning taxpayers about emails that claim to be from their agency discussing the stimulus payments. The emails even claim to be sent directly from the outgoing chairman of the FTC. According to reports, the email demands that you pay money to receive your stimulus payment. It even includes an official looking ‘certificate of approval’.
If you make any motions towards actually making a payment to the scammers, you’ll be told that the payment is for a State Department certificate that proves the funds are not related to any terrorist activity. That may sound made up, but the FTC is assuring us it isn’t.
If you receive one of these emails it is recommended that you just delete it or mark it as spam.
The indicators that this email is a scam are numerous. The first is that the FTC has nothing to do with economic impact payments. That is all handled by the IRS, and they’re not emailing anyone asking for money either. One of the other indicators is that you don’t have to pay for your stimulus payment. The majority of taxpayers just have to keep an eye on their bank account if they have direct deposit, or their mailbox if they don’t. Even if you’re a non-filer and received the initial stimulus payment, you should receive this one the same way.
If you have any further questions about how the economic impact payments are being made, we recommend going to the IRS’s Get My Payment website.
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