How To Avoid These 3 Popular Financial Scams

Bernard Madoff, money manager and accused mastermind of a $50 billion investment fraud. (Photographer: Daniel Acker/Bloomberg News)

These three popular financial scams have been making the rounds with one clear goal: to take your money.

Here’s what to do to protect your wallet:

1. Obama Student Loan Forgiveness Scam

The Scam: A student loan debt company – usually through an online ad or email – will (for a fee) help forgive your student loans through the ‘Obama Student Loan Forgiveness’ program.

What To Know: 

  1. There is no ‘Obama Student Loan Forgiveness” program.
  2. This is a scam that sounds like Public Service Loan Forgiveness, which is a program for public servants that was created by President George W. Bush, not President Obama.
  3. If the company claims to have a relationship with the U.S. Department of Education, it is a scam.
  4. Don’t pay an upfront fee for student loan debt relief.
  5. There’s no student loan forgiveness for private student loans.

What To Do:

You can report the scam to the Consumer Financial Protection Bureau (CFPB).

2. IRS Scam

The Scam: You receive a phone call from someone claiming to be an IRS agent who claims that you owe unpaid income tax. If you do not make immediate payment, the caller says that you will be arrested or face a lawsuit from the IRS.

What To Know: 

  1. The IRS will always contact you first by mail before calling you.
  2. The IRS will never demand immediate payment.
  3. The IRS will never request a specific form of payment such as a wire transfer.
  4. The IRS will not threaten you with arrest or deportation for not paying your taxes.
  5. The IRS will not request personal or financial information by email.

What To Do:

  1. Hang up the phone. If you think you may owe federal taxes, you can call the IRS at 1-800-829-1040 or visit the IRS website for help.
  2. You can report the scam to the Treasury Inspector General for Tax Administration or call 1-800-366-4484.
  3. You can file a complaint with the Federal Trade Commission (FTC) and add “IRS Telephone Scam” to the complaint description. You can also call 1-877-FTC-HELP (1-877-382-4357).
  4. If you receive an unsolicited, online message requesting immediate payment to the IRS, you can report the message to

3. Student Loan Consolidation Scam

The Scam: A student loan company will promise (for a fee) to consolidate your student loans and lower your monthly payments.

What To Know: 

  1. The only official form of student loan consolidation is with the federal government.
  2. There is no fee for student loan consolidation.
  3. If the company claims to have a relationship with the U.S. Department of Education, it is a scam.
  4. Importantly, student loan consolidation does not lower your interest or monthly payment. Rather, your monthly payment is equal to a weighted average of the interest rates on your current federal student loans.

What To Do:

You can also consolidate your federal loans (not private student loans) into a Direct Consolidation Loan with the federal government. This student loan calculator shows you whether you will save more money through student loan consolidation or student loan refinancing.

The best way to lower your student loan interest rate and monthly payment is to refinance your student loans.

With student loan refinancing, there are no origination fees or prepayment penalties, and you can find out your new student loan interest rate in two minutes without any impact to your credit score.

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get The Latest Investing Tips
Straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.