Beware of Common Loan Scams to avoid
It’s nearly impossible to avoid falling victim to unscrupulous individuals trying to scam you out of your money through their so-called “student loans.” Don’t fall for student loan scam calls; it could be a costly mistake. But wait to take action until you’ve done your homework first and talked through all the red flags they’re throwing at you.
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Common Types of Loan Scams
Phishing scams, romantic con games, and frauds perpetrated in the wake of natural disasters are just some of the examples of how opportunistic con artists are continually looking for new ways to take advantage of unsuspecting victims.
Even when there is a pandemic, customers who shop online still need to be on the lookout for fraudulent at-home testing kits and other sophisticated schemes designed to steal their money. A startling 2.2 million fraud events costing a total of $3.3 billion were reported to the Federal Trade Commission by Americans in the year 2020 alone, and the agency continues to see an increase in fraudulent behavior this year, including a significant jump in the number of schemes launched through social media.
If you are aware of the most common types of loan scams, how they function, and how you may protect yourself from being a victim, you have a lower chance of becoming a victim of any kind of fraud attempt.
Scammers see opportunities specially in Social Media. We can guide and support you, contact us now!
Student Loan Programs that You Should Avoid
Below are some of the most common student loan scams that you should look out for.
• Student loan form-filling scam
Want to minimize your monthly student loan payment? You may hire someone to fill out an income-based repayment plan application for you.
StudentAid.gov, the federal government’s student aid website, has income-based repayment forms. Forbearance and deferral requests are similar.
You may employ someone to fill out these forms if you like. You can complete them for free, but some firms take advantage of debtors who don’t know their rights. They charged without offering a free alternative.
• Forgiving, canceling, lowering, or erasing debts for a fee
Debt forgiveness: who wouldn’t desire it? You almost always have to repay loans in full plus interest. Even if you die, your estate may need to pay off your debt (or taxes on forgiven debt) before passing on any assets.
Given how borrowing rules and tax laws are constructed, a company offering to negotiate a student loan debt settlement on your behalf is likely a scam. Don’t believe them if they promise to help you remove college debt via bankruptcy. They can’t get your debt erased if they help you sue your student loan provider.
Scammers in this area persuade borrowers that their debt would be forgiven if they pay a lot of money to a specific company. In certain cases, they may urge borrowers to pay student loans to the company rather than the loan servicer.
In either instance, the borrower will fail and the company will confiscate their money. Due to interest and late fees, they owe even more, and when the loan servicer reports the late payments, their credit scores may drop.
• False relief or forgiveness programs
The CARES Act, passed in March 2020, helped federal student loan borrowers. This includes a payment suspension, all collection attempts, and 0% interest. The White House extended these provisions.
According to the most recent extension, issued on November 22, 2022, payments must halt for 60 days after the Education Department is granted authorization to start debt reduction initiatives. If the system isn’t implemented or legislation isn’t established by June 30, 2023, repayments will resume in August.
Beware anybody proposing to eliminate your debt via the CARES Act, “Biden’s loan forgiveness,” or a “pandemic prize.” Federal Student Assistance, the largest provider of student financial assistance in the country, reports extensive fraud.
Be wary if someone requests personal information like your bank account or SSN to enter a program.
HAVE YOU BEEN SCAMMED AND NEED HELP IN FIGHTING BACK?
Scammers can create complex scams that can trap even the most cautious of people. But it’s not too late because we can help you track the damage done by scammers. We can help you get your money back!
How To Avoid Student Loan Scams
There are four distinct strategies to protect oneself against fraudulent activity involving student loans:
• Only collaborating with partners who have some kind of connection to the Department of Education
Your application for a student loan should only be submitted via the official StudentAid.gov website in order to avoid falling victim to any possible frauds. Check to see whether the company you want to contact is included on the list the government maintains of approved servicers of federal loans before placing a call.
In reaction to threatening phone calls, texts, or emails, you should avoid making accusations that are completely implausible.
This raises severe issues since the Department of Education has said unequivocally that they never send materials in the form of ads. In addition, the government advises borrowers to be wary of any emails that arrive from an address that is not [email protected] or [email protected] This is a warning issued by the administration.
• Don't make student debt installments
Why would someone pay for something that may be had without cost? The process of applying for federal student loan programs does not incur any fees.
The application process will not be sped up, your chances of approval will not improve, and you will not become eligible for a larger loan if you pay a fee accordingly. If you are experiencing trouble making your payments, you should contact the company that services your loan as soon as possible so that they can provide you with information on your options.
• Maintain the confidentiality of your personal information
Be wary of emails or texts that seem to come from a trustworthy source yet ask you for sensitive account information. Even the name, symbol, or badge of the Department of Education might be included in the message if the department so chooses.
Keep in mind that the goal of phishing is to persuade you to click on a link in an email by making it seem like it came from a trustworthy source, When you click on the link, you are often sent to a fake website that attempts to steal your identity by asking for personal information such as your account number, Social Security number, or other sensitive data.
Instead of responding to these sorts of solicitations, you should make direct contact with the Department of Education or your loan servicer by using the legitimate phone numbers listed on their websites.
Check the Personal Loans That You Are Applying
Because of numerous instant personal loan apps, taking a personal loan has set off easy. But even when it is easy to take a loan, you must know its process and fundamentals before availing of an instant loan to get the best deal and avoid rejection of your loan application. Get clever about instant personal loans by reading this piece.
What is PPP Scam?
The Paycheck protection program (PPP) changed in March 2020 because of the government’s reaction to the coronavirus pandemic. In just over three hundred and sixty-five days, the program has given more than $780 billion to almost eleven million humans.
PPP mortgage Fraud occurs when a business or character submits an application or certification for a loan beneath the federal Paycheck protection program; this is fake. Further, if the company or individual no longer abides with the aid of the guidelines on how to spend the budget or falsely applies for PPP mortgage forgiveness, they could
also, be investigated for PPP loan fraud. An enterprise can be accused of PPP fraud if:
- It made a fake assertion at the application
- It applied for PPP loans from a couple of lenders (known as “loan stacking”)
- It used PPP mortgage cash for an unapproved motive
- It submitted a false certification for PPP loan forgiveness.
Over the last 12 months, businesses could apply for PPP loans through industrial banks if they met specific criteria.
The student loan crisis is one of the most challenging financial crises in recent history. Many young people have fallen prey to scammers, who were once considered legitimate banks and credit unions. They target younger students who may be struggling with massive amounts of debt or trying to pay for school and other expenses.
The Claimers provide information about different kinds of scams and how to avoid it.
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