59ºF

Stealing student loans

photo

Millions of students rely on loans to get them through college. But one group of fraudsters turned the student loan business into a money making venture for themselves, until they got caught.

Tom Gasser is a U.S. Postal Inspector and said, "The loans appeared to have been fraudulent and applied for, for the purposes of obtaining money from the Department of Education."

The scam was simple. Either find or steal social security numbers and birth dates of unsuspecting victims and then use that information to apply for a student loan from the government.

"When an application was submitted, it would generate a check in many cases, and that check would be mailed to the suspects," Gasser said.

The funds were never used to pay for courses. They were deposited in personal accounts.

Gasser explained, "When the checks would get cashed, the ring leaders would get most or all of the money depending on the scenario behind it. The majority of it would go to the people running the criminal organization."

Those ring leaders recruited more than 20 people who were paid to find the personal information used to apply for the loans.

"The criminal organization's business is to generate money. And many of these folks are very, very skilled at convincing people to do things that they would not otherwise do," Gasser told us.

Postal inspectors have some important advice about always safeguarding your personal information.

"You run the risk of something being done with your identifying information that you don't intend and you don't want to happen," Gasser added. "Once you give that information to someone else, it's out there."

And never give your information out to anyone who promises easy money in return. Inspectors say "sometimes" your personal information can be compromised without your knowledge. Their advice is to get a free yearly credit report from one of the three main credit companies. Annualcreditreport.com is the site recommended by both the Better Business Bureau and Consumer Reports.