Senior citizens aren’t the only ones being targeted in scams. Some scammers go for those fresh out of college, saddled with student debt.
Scammers try to prey on young adults who may be looking for ways to consolidate or reduce their sometimes crushing loans.
The same advice rings true for these scammers as any others: If an offer sounds too good to be true, or if companies want money up front or your personal information, walk away.
Young adults, or those just out of college, are still learning and could be just as vulnerable as senior citizens, said Christy Page, president of the Better Business Bureau in Akron.
The pool of potential targets is growing as student debt skyrockets.
Student debt nationwide has surpassed car loans as America’s biggest consumer debt, reaching $1.3 trillion last year, according to the Federal Reserve Board of Governors.
“They’re not savvy, experienced consumers yet. They’re apt to think ‘This is great’ ” or really want to believe it when hearing a pitch for lowering loan payments or consolidating their loans,” Page said.
Halle Kelly, 23, could tell some pitches she’s gotten recently didn’t quite add up.
Kelly graduated last May from the University of Akron with a degree in child development and about $20,000 in student loans.
It’s a lot to Kelly, although she acknowledges that it’s a lot less than many of her counterparts.
Still, Kelly, who is a caseworker for an Akron nonprofit organization, said she’s been looking for ways to reduce her $170-a-month student debt payment.
But she’s seen some offers on the Internet and received email offers that she knows aren’t as good as they sound.
“One place wanted $500 right up front. I thought that was weird,” Kelly said.
“The one that really weirded me out was one where ‘We’re going to ask you questions.’ The first question was what was my Social Security number. I just hung up. I’m not even dealing with that,” she said.
Kelly said the person on the phone sounded professional enough and explained that the Social Security number was needed to pull up her loans. She offered to give her loan account numbers. They said no. She ended the call.
Kelly said she’s sure there are legitimate programs out there to consolidate loans, but she hasn’t found one that makes her comfortable yet. Since her payments are manageable, she also said she’s not in dire need to consolidate. She understands, though, if she had $100,000 in student debt like others she knows, she’d be a little more desperate.
Tips
Here are some tips from the Federal Trade Commission and the Better Business Bureau to avoid deceptive student loan practices:
• Never pay upfront. Real lenders will take a percentage once their service is complete. You don’t need to pay an upfront fee beforehand. Know your options. If you are having trouble paying your student loans, contact your lender directly. You can research programs offered by the federal government.
• Never give a third party power of attorney. Don’t sign anything giving a company the power to negotiate on your behalf. A scam company can use this to take control over your loans.
• If it seems too good to be true, it probably is. Any company that claims it can erase your student loan debt in minutes is lying. Don’t bother responding to the ad or email. Student loans can only be forgiven under specific circumstances, which are not fast or easy.
• Don’t let promotions or incentives like gift cards, credit cards, and sweepstakes prizes divert you from assessing whether the key terms of the loan are reasonable.
• Don’t give out personal information on the phone, through the mail, or over the Internet unless you know with whom you are dealing. Private student lenders typically ask for your student account number — often your Social Security number (SSN) or Personal Identification Number (PIN) — saying they need it to help determine your eligibility. However, because scam artists who purport to be private student lenders can misuse this information, it is critical to provide it or other personal information only if you have confidence in the private student lender with whom you are dealing.
• Check out the track record of particular private student lenders with your state attorney general and your local consumer protection agency.
Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty