To: All Destination Points
FROM: Kay Jacks, General Manager
FSA Application, School Eligibility and Delivery Services
SUBJECT: Financial Aid Fraud
SUMMARY: Someone impersonating a U.S. Department of Education official is offering students grants for a processing fee.
Dear Colleague:
It was brought to our attention recently that someone claiming to be a representative of the U.S. Department
of Education (ED) is calling students, offering them grants, and asking for
their bank account numbers so a processing fee can be charged. Specifically,
the caller tells the student he understands the student has federal student
loans and offers to replace the loans with an $8,000 grant. The caller explains
that a processing fee must be charged and obtains the student's checking account
information.
We urge you to remind your
students that there is no ED program to replace loans with grants and that there
is no processing fee to obtain Title IV grants from ED. Furthermore, students
should never provide their bank account or credit card information over the
phone unless they initiated the call and trust the company they are calling.
We recommend that you immediately
e-mail or otherwise contact your current and incoming students to warn them
about this scam. A student who is a victim of this or a similar scam should
take the following steps:
1. Immediately contact
his or her bank, explain the situation, and request that the bank monitor or
close the compromised account.
2. Report the fraud to ED's Office of Inspector General hotline at 1-800-MIS-USED
(1-800-647-8733) or oig.hotline@ed.gov.
Special agents in the Office of Inspector General investigate fraud involving
federal education dollars.
3. Report the fraud to the Federal Trade Commission (FTC). The FTC has an online
complaint form at www.ftc.gov/scholarshipscams
and a hotline at 1-877-FTC-HELP (1-877-382-4357; teletype for the hearing impaired:
1-866-653-4261). The FTC will investigate if the fraud is deemed widespread;
therefore, it is important that every student contacted by the person or people
in question lodge a complaint so the FTC has an accurate idea of how many incidents
have occurred.
4. Notify the police about the incident. Impersonating a federal officer is
a crime, as is identity theft.
When filing complaints,
the student should provide detailed information about the incident, including
what was said, the name of the person who called, and from what number the call
originated (if the student was able to obtain it via Caller ID). Additionally,
if unauthorized debits have already appeared against the student's bank account,
the student should mention this fact in his or her complaint. Records of such
debits could be useful in locating the wrongdoer.
For information about identity
theft prevention, you and your students may visit www.ed.gov/misused.
For information about preventing financial aid scams, visit www.studentaid.ed.gov/lsa.
Sincerely,
Kay Jacks
General Manager
FSA Application, School Eligibility and Delivery Services
Posted July 14, 2004 on www.NASFAA.org, Web Site of the
National Association of Student Financial Aid Administrators
Please submit Web Site questions or comments to Web@NASFAA.org
