(Consumer Safety & Awareness article: Part 44)
Guest Editorial from
Nancy Dickerson, Slightly Creaky Active Living Columnist.
Teachers once taught that a year held four seasons: spring, summer, fall or autumn, and winter. Now certain parts of the country probably had to use a great deal of imagination to divide the days of sunshine from sunshine, but maybe the oranges grew riper during one season or something of that nature. At any rate, children knew fall approached when Halloween and Thanksgiving dominated their art work at school. And finally the winter season had confirmation in pictures of snowflakes and snowmen made of Styrofoam or other art supplies.
Today seasons have completely changed, and the change has absolutely nothing to do with global warming or even political correctness. If spring is now welcomed with a picture of a cardinal, the bird is plainly decorating a baseball uniform. Fall, of course, is welcomed with the bright red bird on a football uniform. In some strange manner the seasons have gone from falling leaves and snowflakes to failing drug tests, breaking bats, and an entire battalion of assorted creatures which somehow have come to represent team spirit and aggressiveness. Who knew that a dolphin could be so dangerous? Or that a cardinal could be induced to tear someone’s head off or stomp on another player?
This change in the seasons has not restricted itself to one nation; indeed, some nations have divided themselves along national sports boundaries. Soccer games or some other event can ignite riots and a national emergency. Stampeding fans and stadiums that are ill-equipped for the enthusiasm of sports fans have been responsible for deaths in many countries.
Finally, from these changes have come new heroes—the national champion sports stars. Strength, agility, precision, and natural athletic abilities bring admiration beyond belief to men and women who become national symbols. Those men and women receive remuneration many times higher than many other well-known individuals.
But the wealth and fame come with a price. Just as the flashy cardinal is instantly recognizable, so too are many famous sports figures. Unfortunately, notoriety quickly follows the loss of anonymity when these men and women lack the morals or character of true heroes. Thus has developed the latest seasonal game: disparagement of the intrepid dissolute. Will teachers soon be teaching children how to draw and use a megaphone?
Tuesday, December 15, 2009
Monday, December 7, 2009
Education Scams (Part 5)
(Consumer Safety & Awareness article: Part 43)
(Continued from two weeks ago.)
Previously we looked at Pennco Tech, a school in New Jersey and Pennsylvania that, according to many who reviewed it on the Internet, does not live up to their promises.
ITT, a highly advertised technical correspondence school, also has a huge amount of complaints listed against it. Here is one from a former ITT instructor. “The school is a scam that preys on stupid, uneducated people for the $40,000 federal student loans that they obtain. The books are a joke, the curriculum is written for morons, and the credits don't transfer.”
There is a list of litigation taken against ITT including, “ITT Educational Services, which operates ITT Technical Institute across the country, agreed to pay $725,000 to settle an investigation by the California attorney general’s office. The investigation found that the school improperly calculated students’ grade-point averages in order to facilitate students’ collection of financial aid from the state. It was launched as a result of numerous allegations from former employees and instructors.”
Here is another of the many complaints against them: “It's amazing how easy it is to make money in America. America used to be the land of the free. Now-a- days, it's the land of the free to be exploited. ITT Tech is a prime example of this. Their scam? Let virtually anyone in, and charge top dollar for an education that is comparatively worthless. ITT is just like the sub-prime mortgage lenders of recent years. Their prey is exactly the same. Both promise our less qualified citizens a heretofore unavailable piece of the American dream – a home or a college education -- and then they break that promise with educational standards that are too low or mortgage payments too high. And the end result is virtually the same – a lot of debt and nothing to show for it, except a wealthier corporation. Well, at least until the house of cards come crashing down.”
Associated Content.com has this: “According to the Department of Labor, Information Technology careers occupy four of the five fastest growing occupations in the United States with phenomenal growth foreseen over the next seven to ten years. In response to this, a huge industry has sprung up to provide training to people who want to ride the wave of ITT success. The advertisements are slick, moving and very enticing. Testimonials from actual students talking about how attending this or that technical school changed their lives, saving them from a life of laying roofing shingles or flipping burgers. Sometimes there will be large ads in the local paper about how people with the right certifications can make 50, 60 or even 70 thousand dollars per year.”
For a person who may have gotten off track after leaving high school or an older person who is forced to start a new career, these opportunities appear very appealing and the ads make it look quick and simple. In a matter of a few months, a person can make the leap from manual labor to working in an exciting and rewarding career in the Information Technology industry. The reality is something different.
When a student signs up for a technical school among the first things they will be asked about is financing. The cost of completing all of the courses is generally between $9,000 and $15,000 depending on the school. The student will be asked to fill out forms to request a career loan from one of several providers.
It is important for the student to realize that these are not "student loans" and they are not government backed, although some of the schools may intimate that they are. The student is responsible for the full amount of the loan whether the courses are completed or not. Repayment of these loans is under a special set of rules that allow for minimum monthly payments for the first year and then higher monthly payments for a period of eleven to fifteen years.
The trap in these loans is that unlike normal student loans, the money is often paid by the lender to the school, not to the borrower. In many cases the school receives all of the money up front before the student ever sets foot in a classroom. If the student drops out or fails to complete for any reason, the school usually keeps the money and the loan must still be repaid by the borrower.
I could go on, as there are many more similar complaints. The point is simple: Community Colleges are the best option for those interested in a technical education. There are some good schools out there, but none have the reasonable tuition, the guarantee that the teachers are qualified, and the quality classes offered that the state’s two-year schools offer.
(Continued from two weeks ago.)
Previously we looked at Pennco Tech, a school in New Jersey and Pennsylvania that, according to many who reviewed it on the Internet, does not live up to their promises.
ITT, a highly advertised technical correspondence school, also has a huge amount of complaints listed against it. Here is one from a former ITT instructor. “The school is a scam that preys on stupid, uneducated people for the $40,000 federal student loans that they obtain. The books are a joke, the curriculum is written for morons, and the credits don't transfer.”
There is a list of litigation taken against ITT including, “ITT Educational Services, which operates ITT Technical Institute across the country, agreed to pay $725,000 to settle an investigation by the California attorney general’s office. The investigation found that the school improperly calculated students’ grade-point averages in order to facilitate students’ collection of financial aid from the state. It was launched as a result of numerous allegations from former employees and instructors.”
Here is another of the many complaints against them: “It's amazing how easy it is to make money in America. America used to be the land of the free. Now-a- days, it's the land of the free to be exploited. ITT Tech is a prime example of this. Their scam? Let virtually anyone in, and charge top dollar for an education that is comparatively worthless. ITT is just like the sub-prime mortgage lenders of recent years. Their prey is exactly the same. Both promise our less qualified citizens a heretofore unavailable piece of the American dream – a home or a college education -- and then they break that promise with educational standards that are too low or mortgage payments too high. And the end result is virtually the same – a lot of debt and nothing to show for it, except a wealthier corporation. Well, at least until the house of cards come crashing down.”
Associated Content.com has this: “According to the Department of Labor, Information Technology careers occupy four of the five fastest growing occupations in the United States with phenomenal growth foreseen over the next seven to ten years. In response to this, a huge industry has sprung up to provide training to people who want to ride the wave of ITT success. The advertisements are slick, moving and very enticing. Testimonials from actual students talking about how attending this or that technical school changed their lives, saving them from a life of laying roofing shingles or flipping burgers. Sometimes there will be large ads in the local paper about how people with the right certifications can make 50, 60 or even 70 thousand dollars per year.”
For a person who may have gotten off track after leaving high school or an older person who is forced to start a new career, these opportunities appear very appealing and the ads make it look quick and simple. In a matter of a few months, a person can make the leap from manual labor to working in an exciting and rewarding career in the Information Technology industry. The reality is something different.
When a student signs up for a technical school among the first things they will be asked about is financing. The cost of completing all of the courses is generally between $9,000 and $15,000 depending on the school. The student will be asked to fill out forms to request a career loan from one of several providers.
It is important for the student to realize that these are not "student loans" and they are not government backed, although some of the schools may intimate that they are. The student is responsible for the full amount of the loan whether the courses are completed or not. Repayment of these loans is under a special set of rules that allow for minimum monthly payments for the first year and then higher monthly payments for a period of eleven to fifteen years.
The trap in these loans is that unlike normal student loans, the money is often paid by the lender to the school, not to the borrower. In many cases the school receives all of the money up front before the student ever sets foot in a classroom. If the student drops out or fails to complete for any reason, the school usually keeps the money and the loan must still be repaid by the borrower.
I could go on, as there are many more similar complaints. The point is simple: Community Colleges are the best option for those interested in a technical education. There are some good schools out there, but none have the reasonable tuition, the guarantee that the teachers are qualified, and the quality classes offered that the state’s two-year schools offer.
Thursday, November 26, 2009
Black Friday Starts the Largest Consumer Rip-Off Season
‘Tis the season for giving and for being thankful. And every store in the country is being thankful for the tricks they have learned to use to rip us off. We’re simply going to list some examples.
1. The most popular independent grocery store in the community is noted for its fresh produce, fish, and meat. Four days before Thanksgiving, knowing that customers anticipate their relatively stable and moderate prices and outstanding quality, they raise prices and put out “Sale” tags through the store.
a) Iceberg lettuce had been selling for 89 cents to $1.29 – today’s special was $1.99
b) Romaine was also 89 cents last week. This week it’s $2.99.
c) The most they sold broccoli crowns for during the last year was $1.39 a pound. For this week’s special it’s “on Sale” at $1.69.
There were more than 200 similar examples throughout the store.
2. “Discount” outlet malls bring out the big guns, listing mark-downs of over 50%. Look carefully – all the price tags are new. The brand-name handbag that was selling for $50 for the last three months now has an “Originally sold at $199” or “Compare at $249” and has been marked down to only $89.
3. Sticking with outlet malls…. Many of the products sold there are manufactured specifically for the outlets. They may have the same brand names and styles, but may also be poorly made, seconds, or worse. Yet the prices are, in many cases, the same or just slightly lower than what you would pay for the high-quality merchandise at a department store.
4. You’ll even see signs for “Up to 90% off.” That means items can be anywhere from no discount to 90% and you can bet that most of the stuff is priced for profit. Going through a major department store’s Black Friday ad, we compared the prices with their weekly ads for the last month: not one item was lower and most was at normal retail or slightly higher.
5. Stores tend to spend the week before Thanksgiving repricing their products upwards from 10 to 50%. Then, when they discount them 30 to 50% you may be paying even more than before they went on sale. Weekly sales during the year are almost always better buys than the prices between Thanksgiving and Christmas.
We have spent the last 40 weeks discussing tricks merchants use to trick people. Just to summarize:
1. Shop around. Even when items are marked with such terms as on sale, at the lowest price of the year, or deep discount, you probably can get it for less elsewhere. Compare store ads with the prices at Amazon.com. (And Amazon usually ships for free.)
2. When you see signs that offer great deals, do not be fooled. ‘Tis the season to be skeptical.
3. Avoid gift cards. Read back through past blogs on this site for an explanation as to why. They are almost always money losers.
4. Read the return and refund policies. Some stores give only 3 or 5 days and demand a receipt be included even for exchanges. On occasion items marked as “discounted,” even if they really are not, may not be returned or exchanged.
Some advanced thinking now can save you from the post-holiday credit card bill blues.
1. The most popular independent grocery store in the community is noted for its fresh produce, fish, and meat. Four days before Thanksgiving, knowing that customers anticipate their relatively stable and moderate prices and outstanding quality, they raise prices and put out “Sale” tags through the store.
a) Iceberg lettuce had been selling for 89 cents to $1.29 – today’s special was $1.99
b) Romaine was also 89 cents last week. This week it’s $2.99.
c) The most they sold broccoli crowns for during the last year was $1.39 a pound. For this week’s special it’s “on Sale” at $1.69.
There were more than 200 similar examples throughout the store.
2. “Discount” outlet malls bring out the big guns, listing mark-downs of over 50%. Look carefully – all the price tags are new. The brand-name handbag that was selling for $50 for the last three months now has an “Originally sold at $199” or “Compare at $249” and has been marked down to only $89.
3. Sticking with outlet malls…. Many of the products sold there are manufactured specifically for the outlets. They may have the same brand names and styles, but may also be poorly made, seconds, or worse. Yet the prices are, in many cases, the same or just slightly lower than what you would pay for the high-quality merchandise at a department store.
4. You’ll even see signs for “Up to 90% off.” That means items can be anywhere from no discount to 90% and you can bet that most of the stuff is priced for profit. Going through a major department store’s Black Friday ad, we compared the prices with their weekly ads for the last month: not one item was lower and most was at normal retail or slightly higher.
5. Stores tend to spend the week before Thanksgiving repricing their products upwards from 10 to 50%. Then, when they discount them 30 to 50% you may be paying even more than before they went on sale. Weekly sales during the year are almost always better buys than the prices between Thanksgiving and Christmas.
We have spent the last 40 weeks discussing tricks merchants use to trick people. Just to summarize:
1. Shop around. Even when items are marked with such terms as on sale, at the lowest price of the year, or deep discount, you probably can get it for less elsewhere. Compare store ads with the prices at Amazon.com. (And Amazon usually ships for free.)
2. When you see signs that offer great deals, do not be fooled. ‘Tis the season to be skeptical.
3. Avoid gift cards. Read back through past blogs on this site for an explanation as to why. They are almost always money losers.
4. Read the return and refund policies. Some stores give only 3 or 5 days and demand a receipt be included even for exchanges. On occasion items marked as “discounted,” even if they really are not, may not be returned or exchanged.
Some advanced thinking now can save you from the post-holiday credit card bill blues.
Wednesday, November 18, 2009
Education Scams (Part 4)
(Consumer Safety & Awareness article: Part 41)
Learn at Home & Tech Schools
Many high school students, lacking the grades or the interest to go on to college, seek to get technical training. With a long history of advertising, on matchbooks, in pulp magazines, and now on the Internet, hundreds of companies provide technical training for such people. Scammers, seeing financial gain, have moved in.
Pennco Tech is a good example. Pennco Tech is an actual school, located in Bristol Pennsylvania, with a satellite unit in Blackewood New Jersey. If you go to their web site you will find, “You have goals for your future. Strong ideas about what you want to do, and how you want to live. The problem is that the steps to achieve these goals aren't always clear. Pennco Tech helps you bridge the gap between dreams and reality. We work with you to formulate a solid plan, and then give you the training and employer connections you need to accomplish that plan.”
Sounds good? Yet why do we see things like this posted on the Internet? “Pennco Tech guarantees they will help you find a job. That’s all a sales pitch to get you into their “programs". I am over $10,000.00 in dept for the student loan that I cannot pay back! They will leave you with nothing. Don’t let your fate be the same.”
Here are some more complaints about this school:
“I earned an Associates Degree, which I believe is invalid because the degree has the Bristol, Pennsylvania campus on it. I only was there for the last two weeks of the 18 months I attended. When I asked Pennco Tech why was this, I was informed because the Blackwood, New Jersey campus was not an accredited school and they cannot legally give degrees. I received a diploma also at that time, which had the Blackwood campus on it. The course had to take place the last two weeks in Bristol to make the degree ‘good'. I paid 18 months for a two-week degree.”
“Licensed teachers did not teach the courses that were taught. When we traveled to Bristol the same teachers were sent to teach us. Now there is a case of unlicensed teachers teaching in an accredited school.”
“The course taught outdated computer languages that no one is using.”
“I was just informed by Pennco Tech when I called to get the figures that I paid that the Computer Programming course that I studied was discontinued a few years back due to poor job placement for perspective employees in that field.”
“I am writing this letter to report a fraudulent misrepresentation made by Pennco Tech in Blackwood, NJ. Senior Admissions Representative Karl Mancuso "Guaranteed" lifetime job placements for the Heating, Air Conditioning, Ventilation, and Refrigeration (HVAC) class with a starting salary of $15-28 dollars an hour. He also said if I had good attendance, kept good grades, and participated in class my chance of earning the highest salary of $28 an hour would be more likely.”
“After speaking with Donna, the Career counselor, we were told there are NO jobs for ANY class in the salary range quoted to us by Mr. Mancuso. The actual starting salary is only $9.50 an hour. With a slim possibility, Donna may be able to find me a job paying up to $13. She said she had never heard of an entry-level position paying as high as $28 an hour. Donna also stated that because of equal opportunity employment, everyone’s resume must be sent to prospective employers, not just the people in the top of the class. Everyone must be given the same employment options for every paying job available.”
“I believed at the signing of my enrollment contract with Pennco Tech that I would be earning a full time starting salary of over $20 dollars an hour. I would have never given up my $14 dollar an hour plus commission position, take out $15,000 (plus interest) in student loans, and sacrificed my families (we have 3 kids) future for a job only paying $9.50 an hour. We were lied to and taken advantage of and I would like the school, and Mr. Karl Mancuso held firmly responsible! We relied on him to factually represent Pennco Tech, and it was his lies that we put our future on the line for and enrolled with this school” (Grammar errors in the original maintained.)
More on this topic next week.
Learn at Home & Tech Schools
Many high school students, lacking the grades or the interest to go on to college, seek to get technical training. With a long history of advertising, on matchbooks, in pulp magazines, and now on the Internet, hundreds of companies provide technical training for such people. Scammers, seeing financial gain, have moved in.
Pennco Tech is a good example. Pennco Tech is an actual school, located in Bristol Pennsylvania, with a satellite unit in Blackewood New Jersey. If you go to their web site you will find, “You have goals for your future. Strong ideas about what you want to do, and how you want to live. The problem is that the steps to achieve these goals aren't always clear. Pennco Tech helps you bridge the gap between dreams and reality. We work with you to formulate a solid plan, and then give you the training and employer connections you need to accomplish that plan.”
Sounds good? Yet why do we see things like this posted on the Internet? “Pennco Tech guarantees they will help you find a job. That’s all a sales pitch to get you into their “programs". I am over $10,000.00 in dept for the student loan that I cannot pay back! They will leave you with nothing. Don’t let your fate be the same.”
Here are some more complaints about this school:
“I earned an Associates Degree, which I believe is invalid because the degree has the Bristol, Pennsylvania campus on it. I only was there for the last two weeks of the 18 months I attended. When I asked Pennco Tech why was this, I was informed because the Blackwood, New Jersey campus was not an accredited school and they cannot legally give degrees. I received a diploma also at that time, which had the Blackwood campus on it. The course had to take place the last two weeks in Bristol to make the degree ‘good'. I paid 18 months for a two-week degree.”
“Licensed teachers did not teach the courses that were taught. When we traveled to Bristol the same teachers were sent to teach us. Now there is a case of unlicensed teachers teaching in an accredited school.”
“The course taught outdated computer languages that no one is using.”
“I was just informed by Pennco Tech when I called to get the figures that I paid that the Computer Programming course that I studied was discontinued a few years back due to poor job placement for perspective employees in that field.”
“I am writing this letter to report a fraudulent misrepresentation made by Pennco Tech in Blackwood, NJ. Senior Admissions Representative Karl Mancuso "Guaranteed" lifetime job placements for the Heating, Air Conditioning, Ventilation, and Refrigeration (HVAC) class with a starting salary of $15-28 dollars an hour. He also said if I had good attendance, kept good grades, and participated in class my chance of earning the highest salary of $28 an hour would be more likely.”
“After speaking with Donna, the Career counselor, we were told there are NO jobs for ANY class in the salary range quoted to us by Mr. Mancuso. The actual starting salary is only $9.50 an hour. With a slim possibility, Donna may be able to find me a job paying up to $13. She said she had never heard of an entry-level position paying as high as $28 an hour. Donna also stated that because of equal opportunity employment, everyone’s resume must be sent to prospective employers, not just the people in the top of the class. Everyone must be given the same employment options for every paying job available.”
“I believed at the signing of my enrollment contract with Pennco Tech that I would be earning a full time starting salary of over $20 dollars an hour. I would have never given up my $14 dollar an hour plus commission position, take out $15,000 (plus interest) in student loans, and sacrificed my families (we have 3 kids) future for a job only paying $9.50 an hour. We were lied to and taken advantage of and I would like the school, and Mr. Karl Mancuso held firmly responsible! We relied on him to factually represent Pennco Tech, and it was his lies that we put our future on the line for and enrolled with this school” (Grammar errors in the original maintained.)
More on this topic next week.
Monday, November 2, 2009
Education Scams (Part 3)
(Consumer Safety & Awareness article: Part 40)
When money is needed and people are desperate, scammers move in. Phony scholarships are not common, but high interest and misleading loans for education can ruin a person’s economic future.
Scholarships.com reports, “Scholarship scams are so common that one could easily think they’re a new form of art. Don’t allow yourself to be duped by a scholarship scam artist; you’ll end up spending valuable time and unnecessary amounts of money for absolutely nothing. Luckily, these scams are fairly easy to avoid as long as you recognize the warning signs.”
The U.S. Department of Education suggests, “If you’re searching the Internet for scholarships and visit a site that asks for your credit card or another form of payment before it’ll help you find funding, you might want to keep searching. Similarly, if you or your parents are contacted by an unfamiliar organization that invites you to an “interview” or “seminar” about preparing and paying for college, do your homework. Ask your high school counselor or a college financial aid administrator whether they’ve heard of the organization and know whether it’s legitimate. In many cases, such invitations are a way to get you and your parents to come listen to a sales pitch. The company wants you to pay for advice on scholarships and other funding that you can get free elsewhere.”
FinAid.com, a legitimate financial aid information center, has reports of these types of scams:
1. Scholarships that Never Materialize. Many scams encourage you to send them money up front, but provide little or nothing in exchange. Usually victims write off the expense, thinking that they simply didn't win the scholarship.
2. Scholarships for Profit. This scam looks just like a real scholarship program, but requires an application fee. The typical scam receives 5,000 to 10,000 applications and charges fees of $5 to $35. These scams can afford to pay out a $1,000 scholarship or two and still pocket a hefty profit, if they happen to award any scholarships at all. Your odds of winning a scholarship from such scams are less than your chances of striking it rich in the lottery.
3. The Advance-Fee Loan. This scam offers you an unusually low-interest educational loan, with the requirement that you pay a fee before you receive the loan. When you pay the money, the promised loan never materializes. Real educational loans deduct the fees from the disbursement check. They never require an up-front fee when you submit the application. If the loan is not issued by a bank or other recognized lender, it is probably a scam. Show the offer to your local bank manager to get their advice
4. The Scholarship Prize. This scam tells you that you've won a college scholarship worth thousands of dollars, but requires that you pay a "disbursement" or "redemption" fee or the taxes before they can release your prize. If someone says you've won a prize and you don't remember entering the contest or submitting an application, be suspicious.
5. 419 Scam Scholarship. In a variation of other scams we have seen, some prize scholarship schemes can get you into deep trouble. The sponsor sends the student a check for the scholarship, but requires the recipient to send back a check or cash for the taxes or some other fees. Or the sponsor sends a check for more than the scholarship amount and asks the recipient to send back a check or cash for the difference. The scholarship check ultimately bounces, as it is a forgery, but by then the recipient’s funds are long gone.
6. The Guaranteed Scholarship Search Services. Beware of scholarship matching services that guarantee you'll win a scholarship or they'll refund your money. They may simply pocket your money and disappear, or if they do send you a report of matching scholarships, you'll find it extremely difficult to qualify for a refund.
7. Investment Required for Federal Loans. Insurance companies and brokerage firms sometimes offer free financial aid seminars that are actually sales pitches for insurance, annuity and investment products. When a sales pitch implies that purchasing such a product is a prerequisite to receiving federal student aid, it violates federal regulations and state insurance laws.
8. Free Seminars. You may receive a letter advertising a free financial aid seminar or "interviews" for financial assistance. Sometimes the seminars do provide some useful information, but often they are cleverly disguised sales pitches for financial aid consulting services (e.g., maximize your eligibility for financial aid), investment products, scholarship matching services and overpriced student loans.
The College Board reports on a number of different scams:
9. Our scholarship is guaranteed or your money back. No one can guarantee that they'll get your child a grant or a scholarship. Refund guarantees often have conditions or strings attached. Get refund policies in writing—before you or your child pays
10. You can't get this information anywhere else. There are many free lists of scholarships available. You and your child should start researching scholarships at the high school or library before you decide to pay someone to do the work for you.
11. Need Your Financial Information. “I just need your credit card or bank account number to hold this scholarship.” No one should give out a credit card or bank account number on the phone without getting information in writing first. It may be a set-up for an unauthorized withdrawal from your account.
12. We'll do all the work. Don't be fooled. There's no way around it. Your child must apply for scholarships or grants himself.
13. The scholarship will cost money. Don't pay anyone who claims to be "holding" a scholarship or grant for your child. Free money shouldn't cost a thing.
14. You've been selected by a national foundation to receive a scholarship, or - You're a finalist, in a contest you never entered. Before you or your child sends money to apply for a scholarship, check it out. Make sure the foundation or program is legitimate.
Fraudulent scholarships can take many forms; some of the most common types have been presented here. If you receive an offer that uses one of these tactics, be suspicious. If you believe the offer is a scam, report it. Sometimes a scam persists for years before people catch on to it. Even when people realize they've been cheated, few file a complaint.
When money is needed and people are desperate, scammers move in. Phony scholarships are not common, but high interest and misleading loans for education can ruin a person’s economic future.
Scholarships.com reports, “Scholarship scams are so common that one could easily think they’re a new form of art. Don’t allow yourself to be duped by a scholarship scam artist; you’ll end up spending valuable time and unnecessary amounts of money for absolutely nothing. Luckily, these scams are fairly easy to avoid as long as you recognize the warning signs.”
The U.S. Department of Education suggests, “If you’re searching the Internet for scholarships and visit a site that asks for your credit card or another form of payment before it’ll help you find funding, you might want to keep searching. Similarly, if you or your parents are contacted by an unfamiliar organization that invites you to an “interview” or “seminar” about preparing and paying for college, do your homework. Ask your high school counselor or a college financial aid administrator whether they’ve heard of the organization and know whether it’s legitimate. In many cases, such invitations are a way to get you and your parents to come listen to a sales pitch. The company wants you to pay for advice on scholarships and other funding that you can get free elsewhere.”
FinAid.com, a legitimate financial aid information center, has reports of these types of scams:
1. Scholarships that Never Materialize. Many scams encourage you to send them money up front, but provide little or nothing in exchange. Usually victims write off the expense, thinking that they simply didn't win the scholarship.
2. Scholarships for Profit. This scam looks just like a real scholarship program, but requires an application fee. The typical scam receives 5,000 to 10,000 applications and charges fees of $5 to $35. These scams can afford to pay out a $1,000 scholarship or two and still pocket a hefty profit, if they happen to award any scholarships at all. Your odds of winning a scholarship from such scams are less than your chances of striking it rich in the lottery.
3. The Advance-Fee Loan. This scam offers you an unusually low-interest educational loan, with the requirement that you pay a fee before you receive the loan. When you pay the money, the promised loan never materializes. Real educational loans deduct the fees from the disbursement check. They never require an up-front fee when you submit the application. If the loan is not issued by a bank or other recognized lender, it is probably a scam. Show the offer to your local bank manager to get their advice
4. The Scholarship Prize. This scam tells you that you've won a college scholarship worth thousands of dollars, but requires that you pay a "disbursement" or "redemption" fee or the taxes before they can release your prize. If someone says you've won a prize and you don't remember entering the contest or submitting an application, be suspicious.
5. 419 Scam Scholarship. In a variation of other scams we have seen, some prize scholarship schemes can get you into deep trouble. The sponsor sends the student a check for the scholarship, but requires the recipient to send back a check or cash for the taxes or some other fees. Or the sponsor sends a check for more than the scholarship amount and asks the recipient to send back a check or cash for the difference. The scholarship check ultimately bounces, as it is a forgery, but by then the recipient’s funds are long gone.
6. The Guaranteed Scholarship Search Services. Beware of scholarship matching services that guarantee you'll win a scholarship or they'll refund your money. They may simply pocket your money and disappear, or if they do send you a report of matching scholarships, you'll find it extremely difficult to qualify for a refund.
7. Investment Required for Federal Loans. Insurance companies and brokerage firms sometimes offer free financial aid seminars that are actually sales pitches for insurance, annuity and investment products. When a sales pitch implies that purchasing such a product is a prerequisite to receiving federal student aid, it violates federal regulations and state insurance laws.
8. Free Seminars. You may receive a letter advertising a free financial aid seminar or "interviews" for financial assistance. Sometimes the seminars do provide some useful information, but often they are cleverly disguised sales pitches for financial aid consulting services (e.g., maximize your eligibility for financial aid), investment products, scholarship matching services and overpriced student loans.
The College Board reports on a number of different scams:
9. Our scholarship is guaranteed or your money back. No one can guarantee that they'll get your child a grant or a scholarship. Refund guarantees often have conditions or strings attached. Get refund policies in writing—before you or your child pays
10. You can't get this information anywhere else. There are many free lists of scholarships available. You and your child should start researching scholarships at the high school or library before you decide to pay someone to do the work for you.
11. Need Your Financial Information. “I just need your credit card or bank account number to hold this scholarship.” No one should give out a credit card or bank account number on the phone without getting information in writing first. It may be a set-up for an unauthorized withdrawal from your account.
12. We'll do all the work. Don't be fooled. There's no way around it. Your child must apply for scholarships or grants himself.
13. The scholarship will cost money. Don't pay anyone who claims to be "holding" a scholarship or grant for your child. Free money shouldn't cost a thing.
14. You've been selected by a national foundation to receive a scholarship, or - You're a finalist, in a contest you never entered. Before you or your child sends money to apply for a scholarship, check it out. Make sure the foundation or program is legitimate.
Fraudulent scholarships can take many forms; some of the most common types have been presented here. If you receive an offer that uses one of these tactics, be suspicious. If you believe the offer is a scam, report it. Sometimes a scam persists for years before people catch on to it. Even when people realize they've been cheated, few file a complaint.
Subscribe to:
Posts (Atom)