Drexel News Alert: Financial Aid Scam - Identity Theft

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[originally posted on the Drexel official mailing list...]

SUMMARY: Someone impersonating a U.S. Department of Education official is offering students grants for a processing fee.

It has been brought to our attention 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 want to remind you 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, you should never provide their bank account or credit card information over the phone unless you initiated the call and trust the company you are calling.

If you are a victim of this or a similar scam, you should take the following steps:

1. Immediately contact your 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 [External Link]. 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 http://www.ftc.gov/scholarshipscams [External Link] 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, you 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 you were able to obtain it via Caller ID). Additionally, if unauthorized debits have already appeared against your bank account, you should mention this fact in your complaint. Records of such debits could be useful in locating the wrongdoer.

For information about identity theft prevention, you may visit http://www.ed.gov/misused [External Link]. For information about preventing financial aid scams, visit http://www.studentaid.ed.gov/lsa [External Link].

Melissa M. Englund
Director of Operations
Office of the Provost
Drexel University

menglund@drexel.edu [External Link]