Thieves up their game with fake accounts, school loan scams

Financial fraud scammers have shifted their tactics during the past couple of years in ways that consumers need to understand and learn how to prevent, according to the Identity Theft Resource Center (idtheftcenter.org).

Rather than thieves using stolen personal information to take over existing financial accounts, they are instead opening new accounts in the victim's name, according to the center's new Trends in Identity report.

More than 60% of people who reported financial fraud to the resource center in 2021 said a new credit card or bank account was established with their identity.

That happens when a bad actor uses personal information stolen in a data breach or collected from a victim who was "tricked into sharing information with criminals," the report says.

"This trend is disturbing because existing account takeover is more easily detected by victims and easier to dispute than new account fraud, particularly new account fraud involving bank accounts," it says.

Such cases rose during a time when financial institutions had closed physical locations due to the pandemic, so it became common for them to accept online applications.

That paved the way for scammers to open accounts, which they used to deposit money stolen from the same victim, the center says. Much of that stolen money in 2021 came from the theft of pandemic-related government payments, such as unemployment insurance benefits and stimulus and child tax credit payments.

One victim told the resource center about fake accounts opened in her name at four different banks, while another received notice that someone tried to apply for a credit card with his child's information.

Here's how to stay vigilant and avoid this, according to the resource center:

Freeze your credit report. This will limit access to your account and help prevent identity theft. It won't affect your credit scores, but you will have to unfreeze the account if you are taking out a loan. You can do this online, by phone or by mail.

Check credit reports regularly to watch for unauthorized activity, such as inquiries for credit that don't come from existing creditors and that you did not initiate.

Guard personal information - logins and passwords, Social Security number, driver's license number - and do not share unless absolutely necessary.

Student loan scams

One thing about scammers - they stay up on the news.

The Federal Trade Commission is warning people about student loan scams, following the new government loan forgiveness program.

The plan includes cancellation of up to $20,000, and the U.S. Department of Education is working on the details of who is eligible and how to apply. Also, the federal student loan payment pause has been extended to Dec. 31 of this year.

Loan forgiveness "won't happen overnight, and (the education department) will announce it widely when the program opens up for debt forgiveness," the FTC says.

In the meantime, you do not need to pay anyone to sign up for the new program or the pause extension, despite what a caller or texter might claim.

"Nobody can get you in early, help you jump the line, or guarantee eligibility," the FTC says. "And anybody who says they can - or tries to charge you - is (1) a liar, and (2) a scammer."

Contact Ellen Marks at [email protected] or 505-823-3805 if you are aware of what sounds like a scam. To report a scam to law enforcement, contact the New Mexico Consumer Protection Division toll-free at 1-844-255-9210, prompt 5. Complaints can be filed electronically at nmag.gov/file-a-complaint.aspx.

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