Don’t Let Your College Student Become a Target
Con artists have been around forever. Scams have caught unwary victims before, and they will again. But it seems that one of the newest targets for these unsavory characters is college students, and often their parents as well. Make sure you stay alert and talk to your student about being careful as well.
College students may be prime targets of scammers for several reasons. They are busy and distracted, many don’t have much financial or tax experience, most don’t have extensive credit histories yet and/or don’t check them, and they spend much of their lives online.
What’s the latest threat?
According to the Internal Revenue Service, one of the most recent scams involves students receiving a phone call from someone impersonating an IRS official and demanding payment of a “federal student tax.” The IRS wants to make it clear that there is no such tax. But the caller claims that the student owes the tax and that he will call the local police to arrest the student if it is not paid. If the student hangs up, there may be follow-up calls. Often, the caller has just enough information about the student, gleaned from public sources such as directory information, to make the call sound more legitimate.
Often, callers alter caller ID so that it looks as though the call is coming from a government agency or possibly the college financial aid office. Occasionally, calls occurring over the summer may look as though they are coming from an admission office and the caller threatens to drop the student from the new class if payment is not made.
Callers often claim that this call is the final warning before legal action and that it is essential that the student pay to “settle the tax bill”. They suggest that the student pay with a debit card or by adding money to gift cards such as I-Tunes cards because these are untraceable. The amount of money demanded may vary significantly. According to IRS Commissioner John Koskinen, these calls may occur at any time, but often reach a peak in late summer or at the beginning of a new semester in early fall. The IRS suggests that as much as 43 million dollars has been lost to this or similar scams.
Other forms of deception
In a variation of the phony federal student tax call, students may also receive a call claiming to be verifying the student’s tax return information. In order to do this, the caller asks for the student’s personal information such as Social Security number and possibly bank account information. Scammers can use this information to clean out bank accounts, open new credit cards, apply for loans, etc. By the time the student realizes what has happened, it is too late.
In still another variation, students working on campus may receive a call, or even an e-mail, that looks as though it is coming from a college office. It claims that the student needs to verify information as simple as the student’s password to an online payroll site. Once the scammer has the password, he may redirect the student’s direct deposit paycheck to another bank account. These callers are counting on the fact that students may not check their account frequently and may not realize that checks are not being deposited. By the time that they realize it, it is too late.
Yet another popular scam targeting students uses not the phone, but a common college communication tool – fliers posted near campuses. These fliers promise that students can get money by applying for the American Opportunity Educational Tax Credit. Students simply need to “call this number . . . “ This is a legitimate tax credit, but one for which very few students actually qualify unless they are independent (not claimed as dependents on parents’ tax forms) and do not receive scholarship money. In this case, scammers do not ask for money, but again are looking for Social Security and bank information as the “help” the student complete the “necessary” paperwork.
How does my student know these scams are not real?
The IRS is working hard to try to inform students, and their parents, that these calls are not legitimate. They want students, and everyone in the public, to know the following things:
- The IRS will never call to demand payment for anything without mailing something to you first.
- The IRS will never threaten to bring in local police to arrest you.
- The IRS will never demand payment without giving you an opportunity to ask questions or appeal the amount.
- The IRS will never require a specific method of payment such as a debit card or gift card, or by asking you to wire money.
- The IRS will never ask for credit card information.
What should my student do if she receives a call?
There are some things that your student should and should not do if a call comes. Most are common sense, but many of us don’t necessarily rely on common sense under stress. Remind your student of the following:
- Hang up. If the caller calls back, don’t answer.
- Never give out personal information over the phone or in an e-mail.
- If the caller claims to be calling from a college office, call that office (not through the number that the caller gives) or go to that office to ask if they called.
- Call the IRS at their complaint line: 800-366-4484 or go to their scam reporting web page.
- Call the Federal Trade Commission Complaint Assistant.
In addition to immediate actions, encourage your student to regularly do a “check up.” Your student should check bank balances regularly to make sure they seem right, check her credit report at least yearly. One option is to go to www.annualcreditreport.com. She can also be sure to shred any credit card applications she receives and be careful not to leave credit card information, passwords, or Social Security information accessible.
We want to protect our students, but it is important that they be smart about how to protect themselves. Be sure to share this information with your student. And although students are often the target of scams such as these, we should all learn from the information and be sure that we, too, are being careful.