Americans with college loans are being targeted by a growing number of scams seeking to take advantage of the confusion surrounding the Biden administration’s debt cancellation plan, government officials warn.
The Federal Communications Commission has pledged to crack down on robocalls asking former students for financial information under the guise of collecting or forfeiting payments.
Consumers are “likely talking to a scammer” if a robocall urges them to provide money, informs them of loan cancellation fees, or directs them to a website other than StudentAid.gov, the FCC said in its statement. application notice.
The FCC advisory follows separate alerts the White House, Federal Trade Commission and Department of Education issued last month as federal agencies work to shut down scams.
Officials say fraudsters flooded American smartphones with calls and texts whenever the Biden administration took action on student loans. Many fake emails, text messages, calls, and pop-up ads invoke President Biden by name.
The wave of scams began on August 24, when the president announced plans to forgive up to $20,000 in debt per borrower for millions of Americans.
Zulfikar Ramzan, chief scientist at Boston-based Aura, said the cybersecurity firm received reports of scam phone calls “within hours” of the announcement.
“Since the student loan cancellation was announced by the Biden administration in August, there has been a surge in the number of scam calls, emails, and sites claiming to offer students and alumni debt forgiveness,” Ramzan said in an email.
Scams follow a pattern of seeking financial information about the victim or charging too-good-to-be-true fees in exchange for debt forgiveness.
“Fraudulent parties posing as student loan officers or the federal government may text or email you with a link that takes you to a bogus site designed to steal your personal information,” Ramzan said. . “To not answer.”
Internet advertisements touting the scams communicate a false sense of urgency by using slogans such as “act now to qualify for student loan forgiveness before [Biden administration] the program is interrupted.
In a recent review of 242 Google ads related to student loan forgiveness, the nonprofit Tech Transparency Project found that nearly 12% were fraudulent.
Security experts say fraud increases every time the Biden administration announces changes to the federal student loan process.
On Monday, the Department of Education announced a sweeping overhaul of federal student loan guidelines aimed at making debt relief more accessible to borrowers.
The department has also suspended federal student loan repayment seven times since the pandemic shutdowns began in March 2020, most recently pushing back the debt freeze to Dec. 31.
“Scammers like to follow the news and use the news to rip off Americans with their hard-earned money,” said Giulia Porter, vice president of anti-spam and text-blocking app RoboKiller.
RoboKiller estimates that 6 billion robocalls and 31 million robotexts linked to student loan scams have cost US smartphone users more than $5 billion.
Ms Porter said the company first identified an increase in scams after the president’s announcement in August. That month, Americans received approximately 611 million robocalls and 9 million robotexts.
RoboKiller estimates that Americans could see another 5-10% spike in student loan robocalls by the end of this year.
The The FCC said Americans who believe they received a fraudulent call should avoid sharing personal or financial information, hang up, and report it to the federal government.
The agency also wants phone companies to crack down on fraudsters.
“We call on telephone companies to be extra vigilant and take decisive action to block student loan scam robocalls,” FCC Chairman Jessica Rosenworcel said in a statement. “We are prepared to act in any way possible and throw the book on call bots that illegally target consumers.”
James Quaid, founder and CEO of anti-fraud operator GoTalk Wireless, said student loan scammers see smartphones as the easiest way to reach people.
“As many of us are connected to our phones and now use our devices for all services, private and government, this is an easy way for fraudsters to connect with potential victims,” Mr Quaid said.