Fraudulent scholarships can take many forms and unfortunately for some students, mostly Africans, they fall prey to these dubious schemes due to the high cost of obtaining a world class education in a prestigious institution.
Many scholarships are particularly directed at young Africans and people from developing countries around the world, and this is in part is due to the fact that majority of the world’s youth population are in Africa. By the year 2035, the bulk of the world’s youth population will be based in Africa, so there is a rush to create opportunities for young people to get educated and gainfully employed, especially in other countries where their youth population is declining, so that they can stay back to contribute to the nation’s development. Though these opportunities are created, there is still competition amongst young people due to some deficit in experience or education. This leaves others desperate, and, in their desperation – fueled by their economic situation and the prospect of gaining international scholarship to access better economic opportunities, many young African students fall victim of fraudsters. It might come as a bit of a shock to you when I say that not only African students are victims of fraudulent scholarship schemes but also students from developed countries. The latest data from the Federal Trade Commission’s report released in February 2020 says it received 725 consumer reports of problems related to scholarships and educational grants in 2018. This is down slightly from the prior two years, in which the FTC received 972 consumer reports of problems with scholarships in 2016 and 770 reports in 2017. These data are based only on consumer reports of issues, and therefore do not reflect the actual number of fraudulent incidents. From this data still, one can deduce that scholarship scam and fraudulence is an issue for all students, parents and guardians and as such knowing its various forms and identifying them is the key to avoiding them and possibly reporting such scams which are all over the internet.
What are fraudulent scholarships and scams?
Advances in technology have created extremely skilled individuals. Identify theft, spam, phishing, and a number of other schemes have ruined many lives financially, emotionally and even psychologically. Fraudulent scholarships or scams are the various dubious schemes presented in newspapers, articles, television and radio adverts and more predominantly on the internet through false websites by individuals posing as agents of prestigious universities, genuine scholarship giving bodies and organizations. These criminal minds prey on needy scholarship applicants and attempt to steal money, banking details, personal information, and more using a fine suit, tie, phony accent and false websites. Thankfully, there are ways to spot these schemes so you can avoid wasting your precious time and use it to focus on real scholarship applications. But with so many offers of financial aid out there, legitimate and fake, how do know when you’ve hit on the real deal?
Types of fraudulent scholarships and scams
Scholarship scams come in various forms. The promise of a scholarship is usually what fraudsters running a scam website use as their guise, and they are specifically targeting ignorant or unsuspecting students. As a student, you have to be in the know of all their dubious schemes so as to quickly spot, avoid and possibly report such sites to the appropriate authorities.
The Advance fee/ loan scholarship scam
In order to get an educational loan, this scam offers you an unusually low-interest loan rate 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 possibly a scam. For the advance fee scam which is similar to a phishing scheme, you will be contacted via email and asked to pay a certain fee by the scammers. This could for example, be in return for more information or for your application to be submitted. This should be a huge red flag. Information about scholarships are made available publicly and for free. In other advance-fee scams, you are told you’ve been selected for a scholarship that you haven’t even applied for. There’s often the catch that you need to pay some type of transfer or administration fee before you can get the scholarship money. In reality, no money will ever be sent your way. Some smarter fee-based scholarship scammers often go to greater length to make their offers appear legit. They do this by genuinely awarding a large scholarship. While this might not sound like a scam, imagine that 20,000 people pay an application fee of $10. If the organizers pay out a whooping sum of $20,000 to a randomly picked scholarship candidate, they still get to walk away with $80,000 in their pockets. What’s more, their reputation remains intact so they can carry out the ruse over and over, even targeting the same individuals.
The phishing scheme scholarship scam
Phishing is a type of online scam where criminals impersonate legitimate organizations via email, text message (smishing), phone call (vishing), advertisement or other means in order to steal sensitive information. The idea is that the scammer/s are “phishing” for information such as your name, address, phone number, Social Security number, or banking information. A phishing scheme usually starts with an email sent to a large number of recipients. In other cases, attacks could be targeted (this is known as spear phishing). For example, a criminal could obtain a student email list for a particular university. They could then craft a very convincing phishing email aimed at swindling those students. Such a scheme in 2016 targeted students at Queen Mary University London. Students received an email purportedly from the schools’ financial aid department (complete with the school logo) offering a government educational grant. They were asked to hand over personal and banking information in order to receive the grant. The thieves then used these details to withdraw funds from at least one student’s bank account. In each case, chances are, instead of getting information about or applying for a scholarship, you’re really just sending detailed information that a scammer could use in various types of fraud, even identity theft. Here are a few phishing email scenarios:
- The email requests information such as your address and phone number and promises to send more information about a scholarship.
- There’s an application form attached to the email that the sender wants you to complete and send back.
- The email includes a link to an application form on a legitimate-looking website which is actually a “phishing site” designed to steal your information.
Socially savvy scholarship scammers scheme
A new variation on the “too good to be true” scam is currently making the social-media rounds, demonstrating how savvy scam artists can be. Instead of an email or an envelope, this scheme starts with a random friend request on Facebook, Instagram or Snapchat. Accept, and your new friend will start messaging you about a foolproof way to make some money for college: they work for a scholarship provider, and they’ve found a loophole in their system. They just need to enter you as a scholarship winner, and the two of you can split the money. If this was real, of course, it’d be incredibly unethical, and most students would be inclined to block and report the scammer. However, in the midst of financial aid stress, some people may be tempted—and that could cost more than money. In some cases, the social scammer may ask you to send cash as an advance. But in most versions of this scam, they’re not directly looking for a payday—they’re phishing to find out as much about you as they can, from your name and address, to your phone number to the email you use for PayPal or Venmo. Give them enough info, and you won’t just be worrying about paying for college. You’ll be worrying about getting your identity back.
Lottery-based scholarships scheme
Lottery-based scholarships are not necessarily scamming schemes, but they may be something you want to avoid. The way these typically work is, you complete surveys in return for entry into a prize draw (the prize being a scholarship) or applicants may be required to complete specific information to be entered into a scholarship drawing or pool. It is worthy of note that several reputable sites do conduct scholarship drawings and require your information i.e. there are many legitimate lottery-based scholarships out there that do pay out money to the winner. Likewise, scholarships asking for a lot of identifying information may indicate that they are only doing so for identity theft purposes. You have to be careful about entering your email, because once they’ve got you on their list, it’s hard to get off!. This way of getting a scholarship has a catch as no real skill is required to win these lotteries, but rather a winner is drawn at random. The company providing the scholarship is making money off the information you provide when you complete a survey by selling it to third parties. They then pay out a small portion of this profit as a scholarship. This is similar to some fee-based schemes but instead of paying money to enter, you’re giving up your personal information. In this model, the organization needs a large number of applicants to make the scheme profitable. As a result, your chances of winning are very slim. The odds may be no better (or worse) than when you buy a scratch card from your local convenience store. The point of it all is to be careful when entering into a scholarship drawing or offering any of your family’s information such as: Name, Email Address, University Data, Majors, Minors, FAFSA IDs, Credit Card Information, or any other identifying specifics. If the application sounds too good to be true, chances are it is.
Overpayment scholarship schemes
Overpayment scams are very tricky to identify and can be used for a whole host of products and services, including scholarships. The thing about these scams is they really play on your trust as there is an upfront payment (to you) involved. Here’s how it works:
- You receive a letter in the mail stating you have been selected for a scholarship. A cheque comes in the mail with the letter or shortly afterward. Delighted, you deposit the cheque in your bank account.
- Very soon after the cheque arrives, you receive a letter or email, stating that there has been an overpayment of part of the sum.
- Still content with having received at least some money, you send back the portion that was “overpaid.”
- The cheque never clears and you are now out of pocket for the “overpayment.”
Criminal masterminds will go as far as setting up a legitimate-looking application process before putting the overpayment scheme into action.
Sales pitch scholarship schemes
In trying to find a scholarship, you may be invited to a seminar on a topic. Be very wary of these seminars as they can turn into high-pressure sales pitches. Though some scholarship seminars really do stick to the topic of financial aid, but you still need to have your wits about you. There’s a high risk that the organizers will take some type of fee and either walk away with the money, or pay out a nominal amount to make the whole thing look legitimate. Some organizations pretend to be helping students with scholarships, but instead are using the guise to try to sell other products or services. This tactic might be used by firms selling insurance or investment products, usually things you don’t need or want and very likely can’t afford anyway. If you’re invited to a scholarship seminar or one-on-one interview regarding financial aid, there’s a chance that this is where it’s heading.
Key scholarship scam Phrases
According to The Federal Trade Commission, the following suspicious key phrases are employed by internet fraudsters using a scholarship offer as bait.
- “The scholarship is guaranteed or your money back.”
- “You can’t get this information anywhere else.”
- “I just need your credit card or bank account number to hold this scholarship.”
- “We’ll do all the work. You just pay a processing fee.”
- “The scholarship will cost some money.”
- “You’ve been selected” by a “national foundation” to receive a scholarship – or “You’re a finalist” in a contest you never entered.
Spotting and avoiding fraudulent scholarship schemes
Fraudsters can be very crafty and scholarship scams may be difficult to spot, especially when you are desperate and ever so hopeful that someone really does want to help you pay for your education. Here are some tips for spotting and avoiding these types of dubious schemes:
Ask yourself, “Is it too good to be true?”
Nothing is more exciting than getting unexpected good news, whether it’s a check in your mailbox or an email that you’ve won a scholarship. Most people’s first reaction would be to deposit the check, click the accept button, and tell your Facebook friends about your good fortune. But if you don’t read the fine print first, you could be making a costly mistake. If you think something is just too good then sit back and do a little more research as things that sound too good to be true, usually are.
Contact the scholarship giving body or organization
If you have a scholarship offer that is asking for money up front or you want to make sure they are real, contact them personally and make sure you can get hold of them by phone and ask for their physical address and any other information you want. Real companies will be glad to hand this information out and scam organizations will be hesitant to do this.
Be careful of a sense of urgency
While most scholarships do have deadlines, you likely wouldn’t be contacted a few hours or days beforehand. In fact, it’s highly unlikely that someone providing a real scholarship would ever contact you asking you to apply. Criminals use the tactic of creating a sense of urgency to throw you off your guard and comply with whatever they’re asking. For example, below is a June 2019 scam report from the Better Business Bureau (BBB) Scam Tracker. This scholarship scam phishing email included a timeframe within which the recipient should respond (24 hours). Otherwise, the sender threatened someone else would be selected for the scholarship.
Question money-back guarantees
Some fraudsters will use a money-back guarantee offer to ply you to pay them a fee. But let’s face it, the only way they’d be able to guarantee you a scholarship is if the process is rigged. As the Federal Trade Commission (FTC) highlights: “Legitimate companies never guarantee or promise scholarships or grants”. Another claim that may be used to attract your attention is the promise that everyone is eligible. Of course, for a real scholarship, there is a set of criteria that applicants have to meet to be considered for the prize.
Be vigilant to spot phishing emails and websites
Some phishing schemes are easy to spot while others are complicated and very deceiving. Key things to look out for are poor spelling and grammar, an email domain that doesn’t quite match the organization’s name, and links that appear to go to different domains (hovering over a link will show you where it’s going to send you). If you do end up clicking through to a website, tell-tale signs of a phishing site include lack of contact and “about us” information and outdated copyright information.
How to report fraudulent scholarship schemes
Do you suspect someone is trying to scam you? Or have you or someone you know already fallen victim to a scholarship scam? The government is aware that such scams are taking place and has taken steps to prevent it, including devising the College Scholarship Fraud Prevention Act of 2000 (P.L. 106-420), which created enhanced penalties for scholarship fraud. However, law enforcement agencies are finding it difficult to prosecute in such cases, often due to lack of information and evidence. Many people simply don’t report scams, mostly because they feel ashamed or believe they have no hope of getting their money back. Just bear in mind that reporting scams can help solve the problem by providing authorities with additional information and raising overall awareness. Here’s a handy list of contacts for the US and a few other countries:
In the US:
National Fraud Information Center (NFIC) (Phone 1-800-654-7060)
Federal Trade Commission (Phone 1-877-382-4357)
The attorney general’s office for your state
Better Business Bureau (Phone 1-703-525-8277)
Postal Crime Hotline (Phone 1-800-654-8896)
In the UK:
Canadian Anti-Fraud Centre
Spam Reporting Centre
Department of Human Services Scams and Identity Theft Helpdesk (Phone 1800 941 126)
ReportCyber (for cybercrime).
Information they say is power which makes it imperative that you as a student (whether an international student or a home-based Student) should be privy to genuine information that aids your quest for a scholarship. Always bear in mind that some scam sites may find their way into genuine scholarship websites and search engines, so it’s always good to think twice and do some thorough checks before submitting your information. Good luck in finding a genuine scholarship.