Student loans being targeted by scammers

HOLLDAY — It started with notices stating he was delinquent on student loan payments.

Now, police are trying to figure out how an 86-year-old Holladay man's name ended up on a student loan application as a co-signer for a man he never met, and if that man actually ever attended school.

For the financial crimes unit of the Unified Police Department's Holladay precinct, the case is just the latest fraud and forgery scam that detectives have been called to investigate. In listening to detectives Victor Shaw and Angela Roe talk about the types of financial crimes they're currently investigating, it's clear they are never bored.

But in many cases, catching a scammer and prosecuting them is the hardest part. That's why Shaw emphasizes that "preventing it and stopping it is the only way to make it work."

Student Loan Scam

An elderly Holladay resident began receiving letters from a student loan company in January. Believing the letters were a scam, the man simply disposed of them without reading them. It wasn't until the man received a letter from a law firm seeking to collect overdue payments that his family began investigating.

Shaw says the man is listed as a co-signer on a student loan of approximately $20,000 for someone allegedly enrolled at Salt Lake Community College in 2023. But the victim has never met the person who allegedly took out the loan and the victim's alleged signature was signed electronically.

Roe says she has seen about 10 student loan fraud cases in the past six months. A scammer will typically create a ghost account to enroll in a school, then apply for a student loan, collect the money and disappear. But because all applications and enrollment are done online, no one is physically seen, and the loan money is disbursed so quickly that it's hard to trace, she said.

This is often done through "money mules," she says, while adding that it's essentially a way to launder money. Stolen money will be transferred to a middleman who will get an unsuspecting victim to participate by having them transfer funds in exchange for an allegedly legitimate job. After the money goes through several money mules and is continually divided, it becomes nearly impossible to trace.

Investigators say scammers find many of their victims on the dark web, where a victim's personal information may end up after it is stolen or is sold by a company. Sometimes, Shaw says, victims unknowingly give that information away in email phishing scams.

To prevent becoming a victim, Shaw highly encourages the public to freeze their credit.

"Yeah, that's the biggest thing. Freezing your credit will be your biggest asset," he said.

When a person freezes their credit, "If anybody goes to apply for new credit … like a new credit card or loan, they won't get any information," Shaw said, adding that it's not hard to unfreeze credit when that person actually needs a loan or new credit card.

Warrant scams, spoofed numbers and pressure

Other scams police are seeing frequently include messages allegedly sent by the DMV claiming imminent registration suspension or law enforcement action for unpaid tolls, and law enforcement agencies allegedly calling to claim there is a warrant out for the victim's arrest for skipping jury duty. In each case, the message or caller demands immediate payment to avoid legal action.

"If anyone is pressuring you to make a decision super fast on ones like that, then it's bull crap, because no one is going to pressure you to make a decision right now," Shaw said. "They pressure you into it; they don't want to give you time to think. They don't want you calling somebody else, they don't want to let you think about it."

Another scam includes an alleged bank calling a victim and claiming their account has been compromised and the victim needs to move their money into a courier account for safekeeping.

Police also warn of scammers who "spoof" phone numbers. For example, Roe says just because the caller ID may show a victim's bank on the screen or say "Unified police," people should still verify whether the caller is legitimate by calling their bank or law enforcement agency on their own using an independent number.

Other tips to prevent having your information stolen and becoming a victim of a scam:

• Use a two-step verification process on the account
• Don't use the same password or an easy password
• Monitor the activity on your account
• After receiving an email, hover over the hyperlink to preview its origin
• Use credit cards or cash if possible, and not debit cards, or Apple Pay

Shaw says, unfortunately, if you are tricked into giving someone money for an online purchase, for example, but the seller turns out to be a fraudster, often the bank won't do anything.

"If you initiated the transaction, you won't get money back," he said. "Everybody thinks the bank is going to reimburse them if they get stuck in one of these scams or frauds, and they don't if you initiate it."

Shaw says banks will typically tell a victim, "They didn't steal your information, you gave it to them freely of your own free will, that's on you. Go figure it out."

Being told to use a crypto ATM is another red flag.

"There's no reason in the world (to use it). The fees they charge are 30% to 40% or higher when you go and use the crypto," Shaw said. "No legitimate person is using crypto ATMs."

In March, Unified police began investigating a case involving a man seeking funds from an estate settlement. The man began receiving messages stating that he owed the estate $15,500 in taxes. The victim "stated that he 'foolishly' sent the $15,500 and that the money disappeared. He stated that no funds were released to him," according to court documents. "(He) conducted the transaction online from his residence, using the Coinbase.com exchange. The suspect sent (the victim) a text message that included the bitcoin wallet, where he should send the crypto."

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