Desperation often offers opportunities to the fraudsters. When it comes to student loans, that’s particularly true. With borrowers owing on average over $28,000 and many struggling to pay it back, scammers have no trouble preying on their despair.
That’s the case in West Michigan. Two people received calls from scammers claiming that they can forgive a borrower’s student loans. According to the report in WZZM 13, the fake company charge upfront fees to negotiate the student loan debt with the lender on the borrowers’ behalf, but it actually provides no service. While the calls made the rounds in West Michigan earlier in February, it is not the only case of student loan debt schemes in the United States.
In May, the Federal Trade Commission and Florida announced that they took action against two companies who were running fake student loan debt relief scams. In Florida, Consumer Assistance Project, a scam company, allegedly lured victims by claiming to get rid of their student loan debt. It charged upfront fees on average of $250 and monthly fees of around $303 for their services of up to three years. The company would pretend to evaluate the borrowers and inform them that they qualify for government loan forgiveness programs. Reportedly claiming that they would reduce their student loan debt by 50% to 70%. The reality: according to the FTC, customers did not actually meet the eligibly for the government loan forgiveness programs.
The FTC and the state of Florida also charged Student Aid Center Inc. with a similar scam that charged upfront fees while delivering no relief to the victims. “Consumers should be wary of any company that claims it can eliminate or greatly reduce debt, especially if they ask for money in advance,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection said in an announcement at the time.
As student loan relief scams pop up all over the country, student loan borrowers don’t have to fall victim to them. Applying a level of skepticism goes a long way in protecting yourself, particularly when receiving an unsolicited call, email, or letter in the mail. According to the FTC, student loan forgiveness programs are offered on a limited basis. This is why receiving a cold call about relief should be a big red flag, one that’s best ignored. Borrowers can apply for student loan debt relief individually without having to pay for help, noted the FTC. Rule of thumb: if it seems too good to be true, chances are it is.
Author: Andrew Rombach
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