HOUSTON, Texas (KTRK) -- President Joe Biden recently announced his plan to forgive $20,000 in student loan debt, and a new report says that scammers will take advantage of the opportunity and swindle consumers.
The video above is from a previous report.
In August, the Better Business Bureau wrote that con artists would take advantage of any confusion, similar to government initiatives, such as pandemic relief programs.
The BBB has already reported almost 300,000 scams related to student loan forgiveness, according to the BBB scam tracker.
HOW THE SCAM WORKS
Leah Napoliello of the Better Business Bureau of Greater Houston and South Texas said scammers, sometimes armed with detailed information about people and their loans, have already gotten money out of student borrowers.
They'll want an advance or processing fee and tell you to send that to another person. The victim thinks it is a legit government agency contacting them, and they are supposed to pay. So, they give that money and find out later it was a scam.
A consumer might receive a call from someone claiming to represent a student loan forgiveness program. To see if you qualify, they will ask you to fill out an application online that will consist of filling out your bank information.
One consumer reported their experience. "My daughter received a voicemail from 'the Biden Student Loan Forgiveness Program.' She returned the call and spoke with 'Peter,' who asked for her email address and telephone number. He asked if she wanted to see if she qualified for the loan, but when we started asking him questions, he got frustrated and ended the call," they said.
In another instance, they will ask you to pay a fee upfront or re-direct your current loan payments to them. Another individual recalled the moment they were targeted.
"I got a 'Final Notice' letter listing the debt amount. Thinking it was from the federal student loan department, I called. They had me change my password, get my bank account number, and direct payments to them."
Most of the student loan scams reported are government imposters. The caller might give an ID, badge number, and the last four digits of your social security number. They tell you that you have money owed and could face jail time if payment is not received.
Consumers are warned of new variations as the scammers will possibly get creative.
To avoid any scam involving student loan forgiveness, you can follow these tips below:
If you fall victim to this scam, you can report what happened to the Federal Trade Commission or the FBI.