Arkansas Hit with Scholarship Scams

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We have heard of just about every phone scam under the sun, but recent news has revealed another scam, this time involving college students. Reverse phone checks are needed more than ever since scammers will go to any lengths to prey on those who are not suspecting it.

It's scholarship season in Little Rock, Arkansas, a perfect opportunity for phone scammers to take advantage of innocent students. A complete irony -- criminals in search of money are targeting students who are in need of money -- a scam of epic proportions.

For college-bound Arkansas students, a scam to rob what little money they have can put a damper on their new beginnings. The Arkansas Department of Higher Education (ADHE) and the Attorney General's office received reports recently of residents who were called and asked to provide a credit card number as a scholarship processing fee.

As a result of these recent scams, Attorney General Dustin McDaniel issued a consumer alert to warn residents. "We traditionally see around this time of year a number of complaints regarding con artists who attempt to take advantage of hard-working students trying to pay for college," McDaniel said. "Applications for state-funded scholarships don't cost anything. Applications for the vast majority of other financial aid are free as well. Consumers should be wary of guarantees of scholarships in exchange for an advance fee."

A state funded scholarship will never call and request any type of credit card information over the phone, nor do they require funds to process a scholarship. Scholarship programs administered through the ADHE are free of charge and the institution would never contact students for payment of any kind.

According to Interim Director Shane Broadway, "The only financial information that a student may be required to provide is data required for income-based grants and loans. Even those do not require credit card information. Anyone contacted or asked for a credit card number in exchange for a scholarship should let us know at ADHE or contact the Attorney General's office."

It's important to note, though, that some colleges will request fees for copies and transcripts but this is generally done securely. Students should also beware of over the phone payment requests for help services when applying for federal student aid. These services are offered for free throughout the state of Arkansas.

How can you protect yourself against scholarship fraud?

McDaniel outlines these tips for students:

  • If you require service or assistance, speak to a guidance counselor or financial aid advisor first before taking out your wallet and paying private companies. You may be able to get your answers for free.
  • Some private companies may offer aid packages for a fee, but according to the Federal Trade Commission, these companies may take your money and give you nothing for it. If you already paid for a package, watch your debit and credit accounts for withdrawals that you did not authorize and avoid any contests in which you are not sure of the identity of the organization offering the prize.

  • Beware of phone scams where callers will ask for money as a fee for scholarship aid.
  • If you are interested in paying for an assistance program, take the time to research the organization first. Don't give in to high pressure sales pitches. Investigate the company to ensure its legitimacy. If the organization is reliable and honest, they will not mind your investigation as well.
  • Check out all testimonials by calling the people in the advertisement and verifying their identity and that they used the services in which you are interested.

If you are the victim of a scholarship scam, Arkansans are urged to contact the Attorney General to report the fraud immediately via the Consumer Hotline at (800) 482-8982 or (501) 682-2341.