Scammers targeting students with loans, bankruptees, LinkedIn users and more

Beau Bomber was thrilled when he got his first credit card in college. However, he was an impulsive shopper and couldn't resist deals online or at the mall. He graduated from college owing school loans and more than $10,000 in credit card debt. After he landed a job, he rented an expensive apartment and purchased a new car on credit. Eventually he had to hire an attorney to help him file for bankruptcy. Shortly after, Beau received a phone call with his lawyer's caller ID. The stranger on the line — who said he was John, an associate in the law firm — seemed to know everything about Beau's financial difficulties. John told Beau he'd found another of Beau's unpaid debts, and he would have to quickly wire several hundred dollars or the police would arrest him. He wired the money and called his attorney the next day who had no idea who "John" was.

This case is fictional but is representative of this law-enforcement scam directed at those who've recently filed for bankruptcy. See Scammers Cash-in on Fears of Law Enforcement on Scambusters.org. (Don't confuse the scam with identity theft-related bankruptcy fraud in which a fraudster assumes the identity of another person when filing for bankruptcy to attempt to avoid a blemish on his record.)

Fraudsters, who find bankruptcy information and contacts in public records, are effective because they prey on the fears of stressed, panicked victims.

Takeaways for this scam:

• Never wire money to someone you don't know.
• Determine the validity of a call by immediately contacting your attorney.
• Bankrupt individuals seldom face arrest and jail for unpaid debts.
• Tell those you know who've recently filed for bankruptcy about this scam.

Bail-bond scam

Police departments around the world arrest thousands of suspects for all crimes every day, and the courts release most of them on bail. In this law-enforcement scam reported by Scambusters, somehow scammers find defendants' bail bond companies, pose as bond agents, and call the defendants and demand additional payments. The scammers tell the defendants that if they don't immediately pay, the bail bonds will be revoked, and they'll be slammed back in jail.

According to Scambusters, "there have been several incidents of this type in various parts of Texas. One case took on the guise of a grandparent scam in that the phony bond agent reached an elderly relative of the person, with the same warning about re-arrest unless she wired several hundred dollars." The best advice is to not pay the fraudster and call the police to report the scam. As one bond agent said, according to Scambusters, "Once you get out of jail, don't send money. You're done there."

Kentucky student loan scam

On April 16, the Identity Theft Resource Center (ITRC) reported that fraudsters are targeting Kentucky college students with new student loan scams via fraudulent emails and text messages that prompt them to give up personal identifying information (PII) and pay upfront fees to reduce or remove their student debts. All U.S. students with college debt should beware because  this scam will spread.

The fraudsters, who masquerade as workers from student debt relief services, promise students they'll instantly release or reduce their debts if they pay fees and provide PII, such as bank account information, Social Security numbers and federal student and PIN numbers. Of course, after the students pay the bucks and provide their PII, the supposed student debt relief services vanish. Although the ITRC hasn't yet reported that fraudsters have cleared out students' bank accounts, you know that's coming.

Scam takeaways:

• Contact your state attorney general office immediately if you receive an email or text message related to this scam or know someone who was contacted or scammed.
• Be aware of debt-forgiveness program red flags, such as someone contacting you out of the blue using a high-pressure urgent sales pitch including a mandatory upfront fee to eliminate or reduce your student debt.
• Debt-relief companies don't have the authority to offer debt-forgiveness programs.
• Be especially concerned if you're asked to provide any PII.
• Never agree to a power of attorney or third-party authorization agreement with an unfamiliar company.
• Call the Federal Student Aid directly at (800) 433-3243 or the U.S. Department of Education at (877) 557-2575.

LinkedIn job scam

On April 22, the ITRC reported that fraudsters are hacking LinkedIn accounts. They send emails to account users' contacts to tell them they're soliciting résumés to fill several positions. (See LinkedIn Job Scam.)

After a potential victim responds, the fraudster sends him a fake check for several thousands of dollars and instructions to deposit the check in his bank, keep a percentage and upload the reminder to a pre-paid debit card or send it via a wire transfer. The victim gets the bad news when his bank tells him the check bounced and he's responsible for any loss.

To avoid becoming a victim, the ITRC recommends the following:

• Be concerned about any unsolicited job offers.
• Be suspicious of checks you receive from those you don't know.
• Ask yourself why someone would pay you a large amount of money to cash his check and remit a portion back to him when he could just cash the check for the full amount.
• If the job offer is from someone you know, contact him immediately to determine if the job offer is legit.
• Never provide any PII such as banking information or a Social Security number via an email to someone you don't know.

EMV chip scam

New EMV credit cards with secure encrypted microchips are becoming the U.S. industry standard following widespread use in Europe. However, according to the ITRC, scammers in Oklahoma City, Oklahoma (who assuredly will be widening their reach), masquerade as credit card companies, send emails to customers — who haven't yet received their chipped cards — and ask for PII to make "account updates" and/or include links to "continue the process." Of course, once consumers clink the links, malware will be installed on their computers or mobile devices. (See EMV chip scam.)

The ITRC says never respond to emails requesting your PII. Legit credit issuers will only send generic emails and will never directly ask for information. Don't click on links from someone you don't know. If you detect a scam, find contact info from your credit card company and see if it sent you an email.

More help for the community

I hope you'll share this information with your family, friends and clients and include it in your outreach programs. We must step up our efforts to educate the public about these problems. As you can see, cybercriminals take advantage of any opportunity to develop schemes to trick consumers and rob them of their resources. Even though they have the upper hand, an educated community will help curb the damage. Please contact me if you have any identity theft issues you'd like me to research and possibly include in future columns or if you have any questions related to this column or any other cybersecurity/identity theft issue. I don't have all the answers, but I'll do my best to help. Stay tuned!

The author acknowledges that this research was partially funded by the Faculty Research Fund through the School of Graduate Studies and Research at Central Washington University in Ellensburg, Washington.

Robert E. Holtfreter, Ph.D., CFE, CICA, CBA, is distinguished professor of accounting and research at Central Washington University in Ellensburg, Washington. He's also on the ACFE's Advisory Council and the Editorial Advisory Committee. His email address is: doctorh007@gmail.com.