Scholarship Scams
by Brenda Siffring
September 19, 2008
FAFSA Scam
Yesterday one of my clients came in with questions about
his online FAFSA application. It turns out that he went to
FAFSA.us rather than FAFSA.ed.gov. The first site asked all
of the same questions as the government website including asking
for social security numbers, income, birthdates, etc... It
even asked for his "official" pin number. However, before
submitting the information it required a credit card payment of
$79.95 as a processing fee. He did not make the payment, but
he had already given all his personal information to the scam
site. Please advise your clients that they should only use
the website with the ed.gov address and not the first FAFSA site
that pops up during an online search. He was easily taken in
as the site appeared to be official.
Scholarship Scams Tip
Sheet
10 Scam Warning Signs - Several of these red flags could be an
indication that you're dealing with a scholarship scam.
1. Fees: Scammers use bogus fees such as "application," "disbursement," "redemption," and "processing fees" as a way to take your money. Scholarship should not require any fees. Check out the free search at www.fastweb.com.
2. Credit card or bank account information needed: Never give credit card or bank account info to receive aid. If you have, call your bank or credit card issuer immediately.
3. Scholarship guarantee: No one controls judges' decisions. Be wary of "high success rates," which often refer to award matches, not award winners.
4. No work involved: Legitimate scholarship applications require time. No one should complete them for you.
5. No contact information: Before you apply, confirm the sponsor's contact info. The sponsor should supply a valid e-mail address, phone number or mailing address (not a PO box) upon request.
6. Unsolicited scholarship: If you are called to receive an award for which you never applied, be alert. Ask where the sponsor got your contact information.
7. Pressure tactics: Never allow yourself to be pressured into applying for a scholarship, especially if the sponsor is asking you to pay money up front.
8. Claims of "exclusive" scholarship: Legitimate sponsors won't restrict knowledge about their award to a single service.
9. An official-sounding name or endorsement doesn't automatically mean legitimacy: A sponsor may use words like "national," "education," or "federal" or have an official-looking seal, but might still be a scammer.
10. Your questions aren't answered directly. Proceed with caution if you are not given a straight answer from a sponsor regarding their application, what will be done with your information or other questions.
Scam-Spotting
Rules of Thumb
Don't pay money to get money
Too good to be true? It probably is.
Spend time, not money.
Legit scholarship are never guaranteed.
Feel suspicious? Trust your instinct.
Suspect a
Scam?
If you think you may be dealing with a scammer, follow the
directions below:
1. Save everything you receive from the suspected scammer. Include all correspondence, e-mails or other paperwork. Make sure everything is dated.
2. Take notes during any seminar or phone conversations. Record the date, time, phone number and the person's name with whom you spoke. Also include detailed account of your conversation.
3. Report the suspected scammer to local law enforcement, your guidance counselor and any of the following organizations.
Federal Trade Commission (FTC)
Fill out an on-line complaint form or call toll-free
1-877-382-4357
www.ftc.gov/scholarshipscams
National Fraud Information Center (NFIC)
1-800-876-7060
www.fraud.org
Better Business Bureau (BBB)
Be sure to have the address of the company about whom you are
filing the complaint.
1-703-276-0100
www.bbb.org
United States Postal Inspection Service (USPIS)
1-800-654-8896
www.usps.com/postalinspectors/fraud
Creative Scams:
Seminars and Consultants
Seminars and Consultants find creative ways to take your
money. Know the warning signs and avoid getting scammed.
Seminars:
Claim: "Our presentation is completely free."
Reality: While
the presentation is free, a seminary may use high pressure tactics
to try to get you to sign up for the service. It may also
claim that the price will increase if you do not sign up now, or
that questions can be answered only if you pay.
Claim: "We can help you complete complicated forms."
Reality:
Everyone needs the same information to complete the forms.
If you pay for help, it is still up to you do the work of
assembling the information.
Claim: "We'll find loopholes to help you save money."
Reality:
The company may be encouraging you to commit fraud by
entering inaccurate info to make it seem like you earn less money.
These practices are dishonest and illegal.
Consultants:
Claim: "We'll help you complete complicated forms"
Reality:
You still have to fill out the same basic information for a
fee-based service that you would for the FAFSA; how else would they
get your information.
Claim: "We'll find different ways to report your income
and assets to obtain more aid."
Reality:
a) This information is available for free at FinAid: www.finaid.org/fafsa/maximize.phtml
b) While these services can be legitimate, remember that colleges
can request additional documentation about your finances.
Where Can
I Go For Free Help?
Financial aid should not cost you anything.
Consider getting help from these free sources:
* FastWeb-www.fastweb.com
* Libraries
* US Dept. of Education -http://studentaid.ed.gov
* FinAid - www.finaid.org
* HS counselors
* Any college financial aid office
* www.collegegoalsundayusa.org
