State officials warn of loan forgiveness scams
Provided by the Pennsylvania Department of Banking and Securities:
The Pennsylvania Department of Banking and Securities (DoBS) and the Pennsylvania Department of Education (PDE) are warning consumers of an increase in student loan forgiveness scams.
The COVID-19 pandemic has caused financial hardship for many borrowers seeking assistance. If a student or borrower receives an email, letter, or call regarding student loan debt cancellation, they should pause before sending or confirming personal information.
“With the pandemic continuing, many consumers are looking for financial relief,” Bank and Securities Secretary Richard Vague said. “Like other scams, these perpetrators prey on people’s hope and vulnerability, creating an ideal scenario for taking advantage of them.”
The recent pandemic-related pause in student loan payments, the public is calling for widespread student loan forgiveness, and various executive actions and advantages and regarding loan balances are causing an increase in scams from individuals and businesses who are taking advantage of the confusion surrounding the changing landscape.
“Many students and families across Pennsylvania borrow money to help fund post-secondary education, resulting in debt that can take years to pay off,” Education Secretary Dr. Noe Ortega said. “It is important that borrowers looking for student debt relief be aware of the associated scams and avoid them at all costs. “
The ministry warns borrowers to take the following steps to protect themselves against these types of scams:
- Be skeptical. Scammers often obtain student loan information illegally. Just because someone has information about your loans doesn’t mean they should be trusted.
- Search for the company. Check the validity of the company contacting you as many “companies” run by scammers don’t actually exist.
- Exercise due diligence. Check what program is available to you. Some scams offer to sign up for programs like the “CARES Law Loan Discount” or “Biden’s Discount Program”, which do not exist.
- Verify this email address. Make sure that emails sent to you regarding your student loans come from a dot-gov (.gov) email address.
- Be aware of what legitimate programs will ask you and not ask you. Proceed with caution before sharing any of your sensitive or financial information like a social security number or credit and banking information. If in doubt, hang up and call your repairer directly.
- Pause before acting. Confirm all correspondence or calls with your technician before taking any action.
- Closure of accounts / Stop payment: If you’ve shared your bank account or credit card information with a scammer, immediately contact your bank or credit card company to close your accounts or stop payments.
- Alert your repairer. If you think you’ve been the victim of a student loan forgiveness scam, call your service agent so they can monitor your account.
- Monitor your credit report. Check for suspicious activity. Scammers don’t always use your information right away. It may take weeks, months, or even years for your information to be used for fraudulent purposes. You can also consider freeze your credit in an abundance of caution.
- Report the scam. You can report a student loan forgiveness scam to:
Student loan cancellation isn’t the only financial scam linked to COVID-19. Consumers must be careful and never share financial or other sensitive information with anyone who contacts them in an unsolicited manner.
Anyone can contact DoBS at 1-800-PA-BANKS or 1-800-722-2657 to ask questions or file complaints about financial transactions, businesses, or products.
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