Feds Say Scholarship Scams and Fraudulent Grants On the Rise

Posts Tagged ‘fraud alerts’

Feds Say Scholarship Scams and Fraudulent Grants On the Rise

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Federal authorities have just issued a report to Congress about a rise in scholarship scams and fraudulent academic grants – just in time for the back to school season.

The September 2011 report was a multi-agency effort, with the Federal Trade Commission, the Department of Justice and the U.S. Department of Education all teaming up to weigh in on the issue of scholarship and financial aid fraud.

The study found that the majority of consumer complaints about financial aid fraud have been changing in recent years.

A decade ago, in the early 2000s, most complaints involved scam companies offering bogus search services or businesses that forced students and their families to pay an upfront fee for scholarship and grant opportunities.

By the end of the decade, the biggest problems centered on firms offering questionable financial aid consulting and planning services that would allegedly maximize student eligibility.

In the 2011 report, however, authorities said complaints about scholarship scams and bogus grant opportunities appear to be on the rise again. The report covers developments in the 2010 calendar year.

Among the findings:

Overall complaints specifically about scholarship scams are down, although the total number of financial aid-related complaints rose in 2010 to 718 complaints from 315 such complaints in 2009

The federally reported numbers about scholarship fraud may be under-reported. The study noted:

“The number of complaints contained in the Consumer Sentinel database does not provide a complete picture of the extent of consumer injury from any particular type of fraud (because):

(1) some consumers may complain directly to the company or to law enforcement authorities that do not forward complaints to the Consumer Sentinel database; and

(2) some financial aid scams on the Internet are relatively inexpensive and consumers often do not complain when the financial injury is low”

The scholarship and financial aid complaints lodged by consumers involved many different companies and did not indicate a pattern or practice of fraud by any one company

For more information about avoiding scholarship scams, check out the Department of Education’s Office of Inspector General, which hosts a fraud awareness website at www.ed.gov/misused.

The Department of Education and the FTC have also created a 2011–12 Counselors and Mentors Handbook, which includes a fact sheet based on the FTC’s consumer publication, “Don’t get scammed on your way to college!,” in addition to other information sources on sidestepping financial aid scams.

Finally, the Department of Education’s www.studentaid.ed.gov website and the FTC’s microsite, www.ftc.gov/scholarshipscams, are cross-linked to give consumers the latest, up-to-date information on scholarship scams.

What is a Credit Freeze and How Can I Use One to Protect My Credit?

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Author: The Money Coach

Credit freezes help you thwart identity theft by preventing a crook from opening credit in your name. Credit freeze laws, sometimes referred to as “Credit Lock” laws, began in California in 2003. Now, all 50 states in American, in addition to Washington D.C. and Puerto Rico, have laws permitting residents to lock or shut down access to their credit reports with the credit bureaus. With a credit freeze, an identity thief can’t apply for credit in your name because you must first provide a PIN (Personal Identification Number) to the credit bureaus in order to “unfreeze” or “thaw” out your credit report and allow access to it.

How to Initiate a Credit Freeze

Surprisingly, relatively few people have actually locked their credit reports. By some estimates, only a few hundred thousand individuals have requested a credit freeze – this despite the millions of people who have been victimized by identity theft.

Still, people victimized by identity theft can and do use credit freezes. Additionally, individuals concerned about privacy and unauthorized access to their credit can also initiate a credit freeze. In fact, many states with credit freeze laws have given residents the right to have a credit freeze free of charge.

In order to obtain a credit freeze, you must provide the credit bureaus with the following:

a unique PIN or password
proper identification to verify your identity
proper information regarding third parties who are authorized to review your credit file

Getting a Credit Freeze From Equifax

Equifax does not charge a fee for a credit freeze. It does, however, require that you put your request for a security freeze in writing, and send it via certified or overnight mail to:

Equifax Security Freeze

P.O. Box 105788

Atlanta, Georgia 30348

Getting a Credit Freeze From TransUnion

With TransUnion, the agency used to offer security freezes free of charge online. However, as of July 14, 2009, TransUnion started charging for security freezes. The cost ranges from about $3 to $10, depending on where you live. Also, the fees apply only to those who have not been victims of identity theft. Identity theft victims get freezes free of charge with the credit bureaus. To contact TransUnion about a credit freeze, call 888-909-8872 or write to:

TransUnion Security Freeze

P.O. Box 6790

Fullerton, CA 92834

Getting a Credit Freeze From Experian

At Experian, you can request a security freeze online at www.experian.com/freeze or submit your request in writing. Experian asks you to send your request via certified or overnight mail to:

Experian

P.O. Box 9554

Allen, TX 75013

What You Need to Have When Contacting the Credit Bureaus

Unlike initiating a fraud alert, you must place a security freeze with each individual credit bureau separately. When requesting a security freeze from any credit bureau, be sure to include your full name, complete address (and any previous addresses if you’ve lived at your current residence less than two years), social security number, date of birth and proof of your identity and address together, such as a copy of your driver’s license or a copy of a recent utility bill or credit card statement.

What is a Fraud Alert and How Do I Put One on My Credit File?

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Author: The Money Coach

Fraud alerts help you thwart identity theft by preventing a crook from opening credit in your name. There are two types of Fraud Alerts: an Initial Alert and an Extended Alert. With an initial alert, an ID theft warning statement is placed on the bottom of your credit reports. This statement alerts your creditors that you may have been the victim of fraud or identity theft. Additionally, your phone number is listed on your credit file, so that if anyone pulls your credit, a lender or creditor is supposed to call you first to verify that it’s really you. This process helps stop the identity thieves dead in their tracks. Here are the phone numbers you can call 24 hours a day to set up a fraud alert:

Equifax 800-525-6285

Experian 888-397-3742

TransUnion 800-680-7289

What You Must Know About Fraud Alerts

You only need to call one of the credit reporting agencies to request a fraud alert. Once you put a fraud alert on your credit file at any one of the three credit bureaus, all of them are notified about it.

An initial fraud alert is good for a 90-day period. It’s best used if you suspect someone may have tried some funny business with regard to unauthorized use of your credit or social security number. Once you put an initial fraud alert on your credit file, you are entitled to get a free copy of your report. Upon receipt of your files, review them immediately to search for anything that looks amiss. If there is no fraud that is apparent, you can either ask that the alert be dropped or simply allow it to expire in 90 days. If you do detect evidence of identity theft, your next step should be to request an extended alert.

When to Get An Extended Fraud Alert

An extended fraud alert lasts for up to 7 years, and is sometimes referred to as a “victim statement.” An extended alert should definitely be added to your credit files if you have been victimized by identity theft, because you’ll want to monitor your credit files closely and safeguard further use of your credit for a long time to come. That extended alert statement will also put potential credit grantors on notice about your situation, requiring them to call you before granting any credit in your name.

What You Need to Have When Contacting the Credit Bureaus

Equifax, Experian and TransUnion all allow you to place fraud alerts on your credit files free of charge. Separately, if you want to submit a credit alert to Innovis, contact that bureau at 800-540-2505 Monday through Friday between the hours of 8:00 am and 8:00 pm Eastern Time. Innovis does not share its fraud alerts with the other credit bureaus. If you write to the bureaus to place an extended fraud alert, send them a copy of a valid police report, and proof of your identity and address. Proof of your identity can be a copy of your social security card, a W-2 form, or a pay stub with your social security number on it. To confirm your address, send a copy of your driver’s license, or a recent utility bill or credit card statement showing your name on it and where you live.

What Steps Can I Take To Avoid Identity Theft?

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Author: The Money Coach

Q: What Steps Can I Take To Avoid Identity Theft?

A: To decrease your chances of falling victim to identity theft, you should shred sensitive documents before discarding them, never carry your social security card with you, and say no to anyone strangers who solicit you over the phone or via email and ask for your personal data.

Identity Theft In the Workplace is On the Rise

Additionally, don’t be careless about leaving your purse or wallet around others – even if they’re co-workers, close friends or family members. Believe it or not, one of the most common places where identity theft occurs is in the home and at work. You might think nothing of letting your handbag sit on your desk in your office cubicle, because you are very trusting of your fellow colleagues on the job. They may, in fact, be trustworthy. But what about visitors to the office, the delivery guy who brings pizza for lunch, the cleaning lady who comes by your desk regularly, and any number of other individuals who have access to your work environment? Lock up your wallet, purse, or handbag. Better safe than sorry.

Other Ways to Thwart Identity Theft

Aside from safeguarding your personal data, you can also use the following steps to help deter, detect or minimize the impact of identity theft:

Monitor your credit regularly
Use fraud alerts
Initiate a credit freeze
Consider buying ID theft insurance

Watch Out for Red Flags

Another way to protect yourself is to take a cue from the companies you do business, and learn what they’re doing to safeguard your personal information. In 2009, the Federal Trade Commission launched a website to help organizations covered by “Red Flag Rules” design and implement identity theft prevention programs. Red Flag Rules require a host of businesses and organizations – such as your creditors and financial institutions – to create written programs to identify the warning signs of identity theft, spot those warning signs, and take the proper steps to respond to those “Red Flags.”

The purpose of Red Flags Rules is to slash the impact and frequency of identity theft. To learn more, read the publication “Fighting Fraud with the Red Flags Rule: A How-To Guide for Business,” available at www.ftc.gov/redflagsrule.

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Posts Tagged ‘fraud alerts’