THE Cambridge Connection - Episode 20

So the scammers are always with us. The scam artists, the only criminals we call artists, but you’ve got to respect them, but we’re wary of them. Absolutely. And so just to start off, obviously you have companies that their intentions are just horrible. All they want to do is rip people off.

And then you’ve got companies that just may act inappropriately by the way they conduct their business, which they can be almost deemed a scam. So let’s break down some examples. I know recently Navient had a settlement with regards to student loan and student loan borrowers. Can we talk about that a little bit? Yeah.

And this was a huge settlement. This is one of the biggest companies that deals with student loans. They settled with the Federal Trade Commission, which is, it’s always interesting when that happens, because what happens is they settle without admitting any wrongdoing. So they, no wrongdoing, but how much was the settlement for? Wasn’t it like billions of dollars?

Oh, hundreds of millions of dollars, I believe. Yeah, about canceling 66,000 student borrowers’ loans. 7 billion in delinquent private student loan debt for these borrowers, and then pay another $95 million in restitution. And with Navient, I think one of the big things was that they misrepresented what they were doing. They also seemed to be getting kids involved with loans for for-profit universities where they really didn’t necessarily have much of a chance of getting a job after they graduated.

So there was allegations of collusion between Navient and some of these colleges with major for-profit chains. So the government’s been after them for quite a while. And the whole idea of for-profit colleges, it’s an iffy one. And like you indicated, there are some that are legitimate. However, there are plenty that are tremendously misrepresenting what they offer the students and the cost that they’re charging them.

And again, students, a good majority of them are just coming out of high school. And if they don’t have family engagement and are really paying attention, a lot of kids at that age could get into trouble and do, for the basics, just the amount of money you’re going to borrow when you’ve really never paid bills before at that age. There’s enough to worry about. Then you have to worry about not being serviced properly, either by misleading or just basic services in general when it comes to debt like that. Yeah.

And particularly with these for-profit schools, some of the information had to do with ITT, Technical Institute was one. It’s now not even around. But a lot of these had very low graduation rates and poor job placement records. And so Navient kind of reeled kids in for these when they really didn’t have the information. Or like you say, not even know what questions to ask.

So it’s difficult out there for anyone. These kinds of financial decisions can be quite overwhelming. And if you’re just joining us, this is Gordon Oliver with The Cambridge Connection here with special guest Steve Weissman from Scamicide. So Steve, obviously, this is an important topic. And now, finally, Navient had to pay for that kind of behavior, which is great.

So there’s another initiative, which was called the Game of Loans. Is that correct? Yeah, pretty clever. And this was something that was put together by the Federal Trade Commission and a number of different states’ attorneys general. Because particularly student loans, college expenses are pretty significant.

And there are a lot of scammers out there. And so this Game of Loans was put together a few years ago to go after companies that were scamming kids. One of the real things to look for with it is when there are these kinds of companies that are going to supposedly lower the amount that you pay, first of all, you always got to look at what are they promising. So some of these would promise reductions of 50% or more in the debt. But here’s where the kicker came in.

It was upfront fees, and upfront fees of anywhere between $500 and $2,500. And that is just blatantly illegal, although a lot of people don’t know that, that if you’re going to deal with one of these student loan companies and they’re not allowed to charge you upfront, but they did, they often would also have names that appeared like they were endorsed by the federal government in order to trick people into trusting them. Then they would offer various student loan consolidations with all kinds of fees. So it’s rampant out there for people that just don’t have the education. So Steve, what are the biggest red flags for student loan scams?

What do you think? The biggest thing is you’re paying upfront fee. And certainly if they’re making a promise that they’re going to eliminate your student loan supply, like some of them, as I said, saying 50% drop in your loans, if it sounds too good to be true, it usually is. And once again, the biggest, biggest thing is there shouldn’t be any fees. Legitimate student loan consolidation.

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And so you don’t even need companies like this, but even worse are the ones that charge you and don’t do anything for you or take your money. So the biggest thing is charge you before providing any kind of a result. Yeah, Steve, I actually have a story of a friend of mine’s daughter that we’re going to take a quick break here, but I want to get back to that because everything that you just mentioned, we do a conversation called Real People, Real Problems. We’re going to take a quick break, and when we get back, I’m going to tell you a little bit about the situation. Hopefully for our listeners, they’ll know some warning signs of what to look for.

This is Gordon Oliver with The Cambridge Connection. We’ll be right back. Hi, I’m Christopher Viale, President of Cambridge Credit Counseling. As 2022 begins, The Cambridge Connection is ready to continue to tackle the financial issues and challenges that matter most to you and your family. This month, they’re going to feature critical conversations around student loans, paying off holiday spending, budgeting for the new year, and other financial wellness tips to help you meet any financial challenge.

And as always, they’ll include experts in those fields and a few real life scenarios and success stories to show you how following reasonable steps can help you regain control of your family’s finances and get you back on track toward your goals. 5 FM, or 1400 AM. Or find all The Cambridge Connection episodes anywhere you listen to your favorite podcast. And in the meantime, if you’d like to speak to one of the counselors at Cambridge Credit Counseling, there’s no obligation to call. 1-800-CAMBRIDGE.

Real people real problems student loan story

Welcome back, everyone. This is Gordon Oliver with The Cambridge Connection, here with my co-pilot, Tina Marie, and our special guest today, Steve Weissman from Scamicide. Steve, once again, thank you for joining us. This information is just so very important. Oh, it’s great to be with you.

So we call Real People, Real Problems a segment because we want to tell some stories that we come up with when we’re talking to people about finances, and this one is very close to home. So a friend of mine’s daughter graduated in May, and you know there’s still been the moratorium on making payments, but she received an envelope in the mail that had the Department of Education’s logo on it. She called the number thinking, you know, it’s time for me to pay my student loans because again, fresh out of college, you know, just gotten a job with an investment firm, called the agency and they charged her $900 and then transferred her to a document production service, and they falsified her documents by saying she had a family of five for the income-driven plan to give her a low payment to make it seem like, wow, this is great, I’m in good shape, and then come to find everything got consolidated, but she was on the wrong repayment program. So from then on, we worked with her and her new loan servicer to get things straightened out. So that’s what I, you know, I helped her with that because I had been doing student loan counseling for a while and I just knew once I started talking to her that it was no good.

Very timely, I should say. My daughter received a phone call and on her caller ID, it came up Naviant just last night, asked her to call back. She called back and they asked her to verify her name, address, social, date of birth, all of that pertinent information, and she did. Wow. So, yeah.

They just, we don’t know. I mean, it said they were calling on behalf of Advantage who took over Naviant, so obviously there’s a little bit further investigations that we have to do, but per Steve’s advice, absolutely. I told her, put a freeze on that credit report. As Steve was talking, I sent her a text, freeze your credit report. So you just never know.

This is how scammers work because they know from the article that Naviant lost their contract with the Department of Education, so it would seem normal, right, that that might be happening. That’s how they work. That’s why you have to be careful. Yep. And it’s amazing that this has happened to your daughter because I’ve noticed personally an uptick in phone numbers that I don’t know where they’re calling from.

Looks like they’re from Texas, Mississippi, and that doesn’t necessarily mean that they are either. They could just be using a phone bank. Even emails. You think they might be from a certain organization because they look so legitimate. For instance, at Cambridge Credit, we had received an email which posed as from the president of our company.

com. And if you’re not paying attention, you’re going to respond. Yeah. And some of the biggest companies are getting hacked. So they have the money to invest in the best firewalls.

You still have to do your own due diligence and be careful of what you open and what you respond to in your own personal email. These scammers have an interesting way of disguising themselves and deceiving individuals. And it’s definitely something that we all need to be concerned about. Can you, based on this situation, number one, tell what the red flags are from what I told you story-wise. Number two, when someone gets taken like this, who should they turn to to try to work on getting an authority to go after these bad actors?

Yeah. The problem is, I have a motto, which is, trust me, you can’t trust anyone. And so the first red flag is you get someone offering you some great and great deal. And you’ve got to be a little bit skeptical. And you really have to check out who is contacting you, and not with a phone call to the number that they give you.

I’ll tell you a thing with phone numbers is, sometimes if someone gets a call and it appears to be from your credit card company, and they’re saying that there’s a problem, they give you a phone number perhaps to check with them. You don’t call that number. Flip over your credit card and you’ll get the 800 number to call. But scammers are so good that sometimes they will get phone numbers that are maybe a digit off of the legitimate credit card company. And so you end up thinking you’re calling the real number, but you get the scammers.

So again, you’ve got to educate yourself as to what your options are and who you can deal with. And who you can deal with is the biggest thing, because no matter how much it looks like it’s coming from the Department of Education, you can’t trust it. If you get a robocall, it’s illegal. But a lot of people don’t even know these things. So you’ve got to stick with legitimate sources.

And the Department of Education will also have really good information about what programs are available and what is legitimate. So many scammers out there, and they’re very sophisticated. The average person is not going to be able to recognize it. So you’ve got to be skeptical whenever you are contacted by anyone offering you one of these deals. So that sounds like a golden rule.

If you get solicited, you’re best if you have creditors to go to a bill that you have, that you’ve paid, that you’ve gotten from them, and use the phone numbers that are on your records that you have already. So answering a solicitation, even though it might be legitimate, you’re better off making sure you use the number that you have as far as your creditors’ information. Oh, absolutely. Because it’s just so easy to just respond immediately, particularly if it looks important. And you know, as I said, scam artists, the only criminals we call artists, and some of them are incredibly sophisticated.

And when it’s in an area that is as complicated as student loans, you’ve got to be wary. S. I’m skeptical. Yes. Good one.

I like it. I like that. All right. So are there any other pieces that you can offer that should raise red flags? You know, here again, you’ve got to understand what they’re doing.

You can’t... Again, my other motto of trust me, you can’t trust anyone. You mentioned with the young woman, they signed her up in a program indicating that she had, what, five children, did you say? You’ve got to make sure that you understand before you sign on what they are actually saying that you’re doing and what you signed, because potentially you’re participating in fraud as well. And a lot of times it just, it looks overwhelming.

I invented my own word. It’s called whelming. So much of this can be overwhelming. We want to kind of bring down the complexity somewhat, but you can’t just agree and sign on to any kind of a program unless you have really made sure that you understand what it is and how it works. Yeah, you know, student loans also bring a component of desperation because obviously all of that loan forgiveness talk, everybody wants their loans forgiven now.

It’s one of those bills that they really just say, I’m never going to get out of debt with it. So I just, if I can get the lowest payment or not have to pay at all, that’s great. So desperation kind of feeds into some of these things of why people would respond as well. Oh, absolutely. And you know, that’s why, you know, right now the moratorium on federal student loans has been extended again now till May 1st, but you can bet this is just going to be open season now on everyone that has one of these student loans and you’re going to be getting emails, you’re going to be getting phone calls, and you’ve just really got to be skeptical.

Credit freezes and minors identity theft

The biggest thing again is fees. If they’re asking for any kind of a fee ahead of time before performing any services, that’s a scam, that’s illegal. There’s also a lot of scams involved with the FAFSA forms. And you know, these are the student aid forms that are used generally by so many colleges and prepared by the federal government. Here again, you can’t give away your number or your FAFSA number or your social security number to any company that says they’re going to help you out because armed with that information, they can make you a victim of identity theft.

They can make all kinds of charges to you. You’ve got to definitely be sure of who you’re working with. Steve, I got a couple of questions for you. First of all, is it something, should an individual be concerned if they receive a phone call, say, from another organization, maybe saying that they received a loan from Navient, that now they’re taking over the loan? Is that something that would raise a red flag?

It would to me, yeah. Because here again, under the settlement, Navient is canceling these loans. But even there, there are some loans that weren’t necessarily covered by the settlement. And so it is very complicated. Quite frankly, if someone did get something related to Navient, I would probably call the Consumer Financial Protection Bureau because this was the federal agency that sued Navient.

And there, they would be able to also help you with that. Okay. And also, is it important that someone put a credit freeze on their credit reporting with the credit reporting agencies if they feel they’ve been scammed? You know something? Putting a credit freeze is the single best thing that anyone can do, and it’s free, to protect themselves from identity theft, to protect themselves from someone scamming and getting their monies.

It’s so, so important. And before, the credit reporting agencies were never fans of this. And the reason they weren’t is we are not customers of the credit reporting agencies. Steve Jobs once said, if you’re not paying for a product, you are the product. And it’s our information that’s the product for Equifax, Experian, TransUnion.

These guys make their money by selling our information. And if you have frozen your credit report, they’re not able to sell that information. So they would say, well, you know, it’s going to be so difficult for you when you apply for a loan. You’re going to have to unfreeze your credit and then freeze it again. I got a new car lease recently, and I had to unfreeze my credit.

And it was very simple to do. You could do it online and then have it automatically frozen again. If there was anything good that came out of the major Equifax data breach, which was caused entirely by Equifax’s negligence because they were hacked due to a vulnerability in a type of software called Apache for which a security update had been issued months before, but they just didn’t get around to downloading it and installing it. Congress finally allowed two interesting things when it came to credit thefts. One is they now allowed anyone anywhere to freeze and unfreeze whenever you want without any kind of a charge.

So really good. No downside to freezing your credit and a lot of upside. And the other thing, which particularly we’re talking, you know, kids, believe it or not, minors are far more likely to become victims of identity theft than adults. And the reason is they’ve got clean reports that can be then used by an identity thief to build up credit and then, bam, they move in, they cause all kinds of charges that they don’t pay back. And the young person isn’t aware.

They often don’t become aware that they’ve become a victim of identity theft until maybe they’re 18 and applying for a student loan or a car loan or something like that. So now minors can, for the first time, freeze their, have their credit frozen. And that’s something that really all families should see that they do for their kids. If you’re just joining us, we’re chatting with Steve Weissman, CEO of Scamicide. And Steve, obviously we have 28 minutes on this show and it seems like it goes by so fast and this is such incredible information.

Fraud alerts versus credit freezes and reports

So you were just talking about credit freezes for minors. Can you tell our listeners the difference between what a credit freeze is from a fraud alert and which one’s better and how to do it? Yeah, I’m so glad you asked that, Gordon, because the credit reporting agencies would love you to put a fraud alert. And as a matter of fact, if you go to put a fraud alert on one of your credit reports, say Equifax, they will send that information to the other credit reporting bureaus and put it on there automatically. But with a credit freeze, you have to do it on your own at each one.

The idea with a fraud alert is it doesn’t freeze your credit. It’s a notice on your credit report that says no one should issue credit to you unless they have confirmed personally, like with a phone call or something, with the individual. It’s great in theory. In practice, it’s worthless. A lot of times it’s missed, a lot of times it’s ignored, and the penalty for ignoring it is zilch, nothing.

So fraud alerts are absolutely worthless, but the credit reporting agencies love them because they’re still able to be selling your personal information. So to me, there’s no comparison. The credit freeze, that’s the gold standard. The fraud alert just makes you think you’re protected. So with that said, obviously there’s resources for individuals to be able to pull their credit reports.

So can you share with advice that you would give on how to pull your credit reports? Yeah, and here’s the thing about pulling your credit report, and even if it’s frozen, that doesn’t interfere with it for you to get a copy of your credit report. Actually, there has long been a federal law that allowed you to get a copy of your credit reports free once a year. What we would tell people to do is you can break it down so that you can get them a few times a year by getting, say, get one from Experian, and then four months later get one from Equifax, and then get one from TransUnion four months after that. And to see, first of all, there you will find criminal activity, and the sooner you find it, the better.

But even beyond that, there are so many mistakes that occur. And there was a wonderful case out in Oregon where a woman kept having mistaken information that was really harmful to her credit. They kept coming up again and again, and she would contact the credit reporting agencies, and then they would take it off, and then it would get back again. Finally, she got a huge judgment in court, and what the jurors said when they gave her the judgment was, we didn’t want this woman to have to apply for credit again. And that’s why they gave her the significant judgment.

So checking your credit report is critical, and it’s critical not just for finding fraud and not just for finding the mistakes, because those mistakes can affect whether you get a job. Employers will look at this. Insurance companies will look at this to see if you’re going to get a job. They will, insurance companies, they get to grant you insurance if you’re going to go for an apartment or a mortgage. So many things that we do, people will be looking at your credit report, so you don’t want to be at the last minute trying to fix a problem with it that you could have done earlier if you had checked it out.

Right. So a lot of organizations or institutions will certainly judge you on your credit character, regardless of income or even monthly expenses, various things like that, correct? Absolutely, Gina. Well, we’ve unpacked an awful lot here, Steve, and what you’re doing here to try and help protect consumers is truly incredible. And number one, would you join us again in the future?

Closing thoughts and next episode preview

I know you’re putting these out daily, so we’ll have a lot to catch up on, I’m sure, on things that we can offer for people to protect themselves. Oh, absolutely. It’d be my pleasure. I mean, Gordon, I’ve been a big fan of your work for quite a while, and aligning with you and coming on with you is an honor and a privilege. Thank you so much.

And before we let you go, would you tell our listeners where they can find you and what the website is again? Yep. com. Think of pesticide for scams, it’s S-C-A-M-I-C-I-D-E. And you can subscribe, it’s free, or you can go in there, check out.

I’ve got all kinds of information, including sometimes the Federal Trade Commission will be refunding people money who’ve been scam victims. We’ve got information there. If you’ve been a victim of identity theft, we’ve got all the information you need there. It’s kind of a one-stop shopping for scams and identity theft. It’s incredible.

Again, I’m sharing it, and I know Cambridge, right, Tina, they’ve been sharing it. Definitely. Definitely. We will pass that along. Absolutely.

Appreciate it. Thank you, Steve. Have a great day, Steve. Thank you. Thank you.

com comes in. com is the brainchild of attorney and Bentley professor Steve Weissman. com provides daily, up-to-date information that you can use to avoid the latest scams, identity theft schemes, and cybersecurity threats. com was named by the New York Times as one of the three best sources for information about coronavirus-related scams. com today and subscribe for free to receive a scam of the day alert, or check out Steve’s books, Identity Theft Alert and The Truth About Avoiding Scams, because as Steve says, BS means be skeptical.

Another 28 minutes has gone by, and I can’t believe the incredible information that we shared with Steve today, and one takeaway for our listeners is don’t forget, BS means be skeptical. Huge thank you to Leah and Lisa, our amazing producers. We bring great experts to the show. Next week, we’ve got Jennifer Connelly from Junior Achievement again, and the last time we talked to her, there was a couple of her students with entrepreneurial spirit working on a podcast, so we’re going to have them on as our guests. Oh, great.

Great. To talk about the project and talk about the amazing work that they’re doing. If you missed us or you missed any of our shows, feel free to find our shows where you listen to your favorite podcasts, and of course, if you need help with your credit card and unsecured bills, you can call 1-800-CAMBRIDGE.