FBI, FTC warn of scammers targeting Biden student loan relief efforts
The FBI and Federal Trade Commission are warning people to be wary of scams cashing in on government efforts to provide student loan assistance.
Over the past few months, the White House has touted two different programs designed to help address the student loan crisis in the U.S., where about 45 million borrowers owe more than $1.6 trillion.
The Public Service Loan Forgiveness plan is designed to offer relief to those who have worked in government or public service, while the recently announced Federal Student Loan Debt Relief plan provides those eligible with up to $20,000 in loan forgiveness.
But this week, both the FBI and FTC said scammers are trying to take advantage of interest in the programs both to steal personal data and financial information as well as to siphon off funds.
The FBI released an alert on Tuesday warning of fraudulent websites, e-mails, texts, or phone scams aiming to defraud people seeking federal student loan forgiveness.
“Cybercriminals and fraudsters may purport to offer entrance into the Federal Student Loan Forgiveness program, contacting potential victims via phone, email, mail, text, websites, or other online chat services,” the FBI said.
“[They] use their schemes to receive payment for services they will not provide or collect victim information they can then use to facilitate a variety of other crimes. Entrance into or assistance with any federal student aid program through the Department of Education or their trusted partners never requires payment.”
The FBI added that scammers will often use emails, texts or websites to claim that a person qualifies for government aid and provide fraudulent links that take a victim to a spoofed federal website asking for personal information like Social Security numbers.
Some websites, according to the FBI, will ask for bank account information, routing numbers or credit card numbers under the guise of “application fees.” Some people have also reported similar phone scams.
They urged people to never click on links within emails and always look for the “.gov” at the end of any address purporting to belong to a government official or entity.
A flood of complaints in 2022
The FTC published a similar warning on Tuesday that contained concerns about the same scams the FBI reported.
Michelle Grajales, staff attorney at the FTC’s Bureau of Consumer Protection, told The Record that while most of the scams are related to companies offering fraudulent student loan assistance with the hope of extracting onerous fees, they have also seen instances of scammers using student loan relief as a lure to steal personal data and other information.
The FTC has received nearly 57,000 complaints about student loans generally in the first nine months of this year, and about two-thirds of those are related to student loan debt relief, including scam calls.
These numbers far surpass the volume of complaints reported in 2020 and 2021, which saw totals of about 38,000 and 46,000, respectively.
“What we see is that there are companies that impersonate the federal government or pretend to be affiliated in some manner with the Department of Education or the federal government or a student loan servicer and their goal is to sign people up for these so-called programs or for help with their loans for fee,” Grajales said.
“It’s enormously helpful when people complain because that gives the different law enforcement officers that have access to our database, as well as my own office, access to information to sue and see what’s going on.”
Several cybersecurity experts like Cofense Principal Threat Advisor Ronnie Tokazowski said they have seen scammers impersonate credit organizations offering student loan assistance.
He noted that the application for student loan relief is extremely straightforward with no direct cash-out method offered, reiterating what the FTC and FBI said about never providing credit card numbers or payment information in relation to relief efforts.
He added that the lack of a direct cash-out method was the most ideal solution because it “takes power away from scammers and puts it back on platforms to distribute the money from there.
“With the rise of government assistance programs offering money directly to people, it’s a careful balance of being freely available yet designed in a way to inhibit scammers from taking advantage of programs,” he said.
Cerberus Sentinel’s Chris Clements added that widespread fake IRS telephone fraud campaigns of years past would have been “drastically mitigated” by more deliberate messaging to make it clear that tax officials will never call you.
“It’s a new modern day life skill to be able to filter out scams whether they come from phishing, phone calls, or text messages,” he said.
“It’s an unfortunate reality that everyone needs to come to terms with that a healthy dose of skepticism and independent verification are now the norm.”