When Scammers Target Your Students · Scholarship and financial aid scams ... students avoid...

WHEN SCAMMERS TARGET YOUR STUDENTS Tips & Tools for Educators Gideon E. Sinasohn – Senior Attorney, Southeast Regional Office, Federal Trade Commission

Federal Trade Commission • US consumer protection agency

• Protects consumers from fraud, deception, and unfair commercial practices

• Small, independent agency of 1,100 employees – lawyers, investigators, economists, educators

• Employees in Washington, DC and seven regional offices

• www.consumer.ftc.gov

How we work: law enforcement • Consumers report scams

• ftc.gov/complaint • ftc.gov/queja • US toll-free: 1-877-FTC-HELP (382-4357)

• Other agencies share the complaints they get

• FTC investigates and brings cases

Every Community Initiative • The FTC works for all consumers

• We want to hear from – and reach – every community

• Targeting investigations and tailoring approaches

How we work: consumer education • Educational approach

• Practical, actionable advice • Plain language • Value-neutral • Audience-appropriate

• Outreach to consumers • Online, in print • Media • Partners

What we’re hearing • Scammers are targeting your students

• Non-fluent English speakers • Unfamiliar with US/Canadian systems • Looking for opportunity to get ahead

• But scammers also target everyone • Very good at tailoring their pitch • Professionals

Education • Telemarketing scams, pitching English language products

• Test preparation materials

• Diploma mills

• Scholarship and financial aid scams

• Other abuses

Telemarketing scams

• Sales pitch begins with a telephone call in Spanish

• Telemarketer might use a government affiliation to build trust

• Telemarketer might offer a “scholarship” or discounted price

• After agreeing to purchase, consumers experience nasty suprises

• Threatening debt collection calls

Education and test prep products FTC v. WordSmart, complaint alleges:

• Defendants offered to improve performance in school or help prepare for

standardized tests, for a cost of $15 to $300 for each program.

• Defendants claimed:

• WordSmart was affiliated with local schools or national standardized testing companies.

• By using WordSmart for a total of 20 hours, students were guaranteed to improve letter grades by at least one GPA point, SAT scores by at least 200 points, ACT scores by at least four points, GRE and GMAT scores by at least 100 points, and IQ scores.

• WordSmart would teach students how to learn a word after just 1-5 times, instead of having to view that same word up to 50 times. Its speed reading program would improve reading speed up to 10 times, while improving comprehension.

• Full refund within 30 days if the buyer was not satisfied.

• FTC alleged claims were false or not substantiated.

Diploma mills • FTC v. Diversified Educational Resources, LLC, complaint alleges:

• Defendants used multiple names, including “Jefferson High School Online” and

“Enterprise High School Online”

• Websites claimed that by enrolling in the defendants’ programs, consumers could obtain “official” and accredited high school diplomas and use them to enroll in college, join the military, and apply for jobs.

• Defendants charged students between $200 and $300 for a diploma.

• Defendants misrepresented that the diplomas were valid high school equivalency credentials and that the online schools were accredited. FTC charged that defendants actually fabricated an accrediting body to give legitimacy to the diploma mill operation.

• Took in more than $11 million.

Scholarship and financial aid scams • Their services will ensure that students receive either a scholarship or more

financial aid than students and parents could get on their own; • That millions of dollars of scholarships go unclaimed every year; • They have extremely high success rates, including “testimonials” from

satisfied customers; • They are endorsed or approved by a federal or state agency, a chamber of

commerce, or a Better Business Bureau;

• Money back guarantees. In fact, although they charge fees ranging from $50 to more than $1,000, these operators provide few, if any, services to help students and their families find financial aid. Getting money back is often an exercise in frustration.

Other abuses: • U.S.A. v. FastTrain II Corp., alleged:

• FastTrain, a privately owned, for-profit college in Florida

providing vocational training;

• Pushed to enroll as many students as possible, even those who were not eligible because they did not have high school diplomas or equivalency degrees;

• Charged with submitting and misleading students to submit fraudulent student aid applications in order to obtain millions of dollars in federal aid.

Imposter scams • Take many, many forms:

• “I’m from the IRS and you owe back taxes.” • “You owe money. Unless you pay, you’ll be deported.” • “I’m from tech support. There’s a problem with your computer.” • “There’s a bench warrant out for your arrest.” • “Help, I’m in jail in Mexico. I need bail money.” • “YOU’VE WON!! Just pay some fees to get your millions.” • “Congratulations! You qualify for a government grant.” • “I love you and want to meet you. Can you pay for my plane ticket?”

Imposter scams • One of the fastest-growing scams we see

• Can include many kinds of scams

• Anyone who pretends to be someone they’re not

• Many variations on the approach, but common asks: • Wire money (MoneyGram, Western Union) • Buy prepaid cards (MoneyPak) • Give or confirm personal or financial account information • Send a money order or payment COD • Give access to home computer

Example: FTC v. Centro Natural FTC alleged:

• Defendants pretended to be court officials

• Spanish-speaking telemarketers • Called Latinos, said they owed thousands in debt • BUT – offered a chance to settle debt by buying a box of products

for $350-$500 • If the consumer said no or hung up, got threats and abuse • Centro Natural collected $2 million from US consumers

• The FTC asked a court to temporarily shut down the business and the court entered a preliminary injunction.

Immigration-related scams • Notarios

• are not lawyers • can’t give legal advice • not authorized to help with immigration

• Tax preparers: not typically accredited to provide immigration services

• Look-alike sites • Use seals, seem official – might even copy real government sites • Charge for (free) forms

FTC v. Loma International Business Group FTC alleged that defendants:

• Targeted Salvadoran and Honduran community • Promised immigration help – but not qualified • More than half of the forms they submitted were rejected

by USCIS

Catholic Charities of Baltimore helped the FTC. Business ordered to repay up to $616,000 to consumers. Owners banned from providing or promoting immigration services.

Job scams

• “Great-paying jobs! Guaranteed!”

• You pay for: • Job listings • Special access • Certificates

• Offers appear: • Online (Google ads) • Local papers/media • Telephone poles

Job scams • Signs that it’s a scam:

• Ask for payment up-front • Promise you a job • Guarantee you’ll make money • Say you can work from home • Offer special access to government jobs

Oro Marketing

• Spanish-speaking telemarketers sold goods people could re-sell to make money

• Charged $400-$490 • Actually delivered worthless junk • FTC reached settlement banning the company from working in telemarketing

• Used the story in this fotonovela

What else do you see? • Other types of scams?

• Issues your students and their families face?

• Help they’re getting or not getting?

Common scammer tactics

• They build trust (government; known company; affinity)

• They make big – but plausible – promises

• They ask you for money or personal information

• They want your money fast and may even promise a refund

• They want to rush you so you don’t have time to think

Ways to spot (and stop) scammers? • What other tactics do you see?

• With those tactics in mind, what can we do to help your

students avoid scammers?

Ways to spot (and stop) scammers • Whatever the story or pitch is: stop. Don’t be rushed. • Talk to someone you trust.

• Talking to even one person can make the difference between getting scammed and not.

• Never give money or personal information to anyone who

contacts YOU, asking for it.

• Do not wire money (or give prepaid cards) to a telemarketer.

• Create a plan to get off the phone.

What you can do • Report scams. Report suspected scams. Just report.

• You can report on behalf of your students and their

families. • Put in as much information as you (or they) feel comfortable with • We don’t need their names or contact information, but your name

and contacts would help

Report Scams to the FTC www.ftc.gov/complaint

1-877-FTC-HELP (382-4357)

Every report makes a difference • Reports help us identify a scam

• Might help us shut down a scammer

• Might help other people from getting scammed

• Might help protect the people you care about

Use the FTC’s free resources • Link to/print from the websites

• Grab/cut/paste/re-use the articles, videos and blog posts

• Order free publications: ftc.gov/bulkorder

• Get scam alerts: ftc.gov/scams

• Use Consumer.gov lesson plans (coming soon!)

Use the FTC’s free resources • Consumer.gov - Consumer protection basics, plain and simple

Use the FTC’s free resources • ftc.gov/immigration

Spotting trends? Let me know. • Gideon E. Sinasohn • gsinasohn@ftc.gov

404.656.1366

WHEN SCAMMERS TARGET YOUR STUDENTS

Thanks – Questions?