Maureen Rutecki  |  Partner  |  Published in the Daily Record, July 9, 2019

According to the National Association of Colleges and Employers, almost two million college students will graduate in 2019. Once they walk across the stage, many will be on their own for the first time, looking for or beginning jobs, or continuing education in graduate school.

Regardless of their situations, recent college graduates are big scam targets, since scammers know that college graduates do not understand much about the “real world” yet, making them perfect targets. Parents can help their new grads avoid falling victim to scammers’ plans, by being aware of what to look for.

What to Look Out For

The term scam covers a large set of deceitful practices. Here are some common scams to keep an eye out for:

• Loan Forgiveness – Today, 7 out of 10 graduates leave campus with student loan statements in hand and an average loan balance of just over $37,000. (https://lendedu.com/blog/January-student-loan-survey). Companies promising debt relief, often for a fee, spam these graduates with emails. While it is understandable how enticing loan forgiveness can be, very few graduates qualify. In fact, most such offers are from scammers, trying to make a quick buck.
• Entry level job scams – These scams lure graduates in by using attractive, yet false, phrases. Companies use loose interpretations of appealing phrases, including “sports marketing” and “be your own boss.” In reality, the jobs offered seldom have these characteristics. Other job scams entice victims by providing an unrealistic salary figure. For example, an ad might claim “you could make $35,000 in just one summer!!!!” If you see this, there is a good chance it is a scam.
• Credit card scams – If you are a recent graduate or know one, then you are likely aware of the numerous credit card offers that arrive in the mail. Recent graduates may not comprehend the exorbitant interest rates on some of these credit cards or the impact late payments can have on their credit scores. A survey conducted by Opportunity Financial found that seven in ten college students damage their credit soon after graduation. By not understanding high interest rates, late fees, and the impact of late payments on credit scores, new graduates are vulnerable to credit card scams.
• Unpaid tuition scams – Scammers not only target graduates, but also graduates’ parents with unpaid tuition scams. Parents are typically able to determine whether these offers are fake, but students are less likely to. Scammers will contact victims by phone, telling them in an earnest tone that their tuition bills were not paid and that immediate payment must be made or else their degrees will either not be conferred or will be revoked. Do not send the money. If you want to check the status of your tuition bills, contact the school’s bursar’s office.
• Rental property scams – Landlords recognize new college grads and may adjust lease terms to, for example, charge higher monthly rent than they would for other renters. Recent graduates are easy targets for this scam, because they are often inexperienced renters, or are in new rental markets and are less likely to know fair market rents. Those who rented apartments in college may have had their parents read the contracts. When renting on their own, new graduates do not typically read full contracts, or when they do, they are less likely to fully understand the terms.

How to Protect Yourself from Scams

Scams happen every day, and scammers will not stop trying to get your money, regardless of whether you are a new graduate. However, there are some precautionary measures you may take to ensure you do not become a victim:

• If you are still in college, take a personal finance course. Unfortunately, basic personal finance is not a required class at most colleges, and, according to the Council of Economic Education (CEE), only 17 states require high school students to take courses in personal finance before graduating from high school. Consequently, most college graduates enter their post-college life with no personal finance skills.
• Prepare a budget and have someone else who understands personal finance take a look at it. Consult with them about those budgeted items that you may not be familiar with, such as apartment rent, car insurance or renter’s insurance.
• Be knowledgeable about your student loans and understand that when you graduate, you have a 6-month window until you have to start paying them back.
• Verify the email addresses of your incoming email. If you think an email is from your school, check the actual address and see if it is correct. For example, studentaccounts@school.edu is different than studentaccounts@schoo1.edu). Check for spelling mistakes within the email.
• Make sure a website is legitimate and secure, especially when asked to disclose personal information, such as your Social Security Number or your bank account numbers.
• Check online reviews. If there are none, that is a red flag.
• Finally, if it seems too good to be true, it probably is.

You’ve Been Scammed, What Now?

If you find yourself in the unfortunate situation of falling victim to a scam, there are some actions you can take to minimize your losses. The actions that you take will depend on the type of fraud committed. Here are some examples of what you can do:

• Report the scam to police and provide them with any documentation and communications that you have that may help them.
• Report the incident to the Better Business Bureau.
• Report to the Internet Crime Complaint Center.
• Warn your friends so that they do not fall into the same trap.

Recent graduates have listened to the inspiring commencement speeches about how to conquer the world and achieve their dreams. Now is the time to also share practical advice on how to navigate the transition to the “real world” so that they may keep the focus on the dream and not the harsh truth of financial fraud.

About the Author: Maureen M. Rutecki, CPA/ABV/CFF, ASA is a partner in EFPR Group, LLP’s StoneBridge Business Partners’ division. She developed this article with Larissa Ropitzky, also of the firm’s StoneBridge Business Partners’ division.