by Carissa DeLuca, CPA, CFE
Audit Manager
School is in, and many high school seniors have started the daunting process of looking for scholarships to help with their future college plans. For many, this is an absolute necessity which has made space for opportunistic fraudsters. Here are some fraud red flags students and parents should look out for:
- Application fees for scholarships, especially paid via Zelle, Venmo or Cash App
- Upfront fees to guarantee financial aid
- Emails, texts or letters requiring personal information (including social security number, bank information, etc.)
- Offers for low interest student loans based on an advanced fee
- Commission based fees or processing fees for FASFA completion assistance (there are many free programs and workshops available)
- Scholarship prize scams that require payment of taxes or redemption fees
- Costly seminars that promise secret scholarships
Despite the many fraud schemes out there, there are many generous organizations that are providing free scholarships. The best way to tell them apart is to keep in mind a real organization will not ask for application fees or upfront costs, etc. and will not ask for your bank information or social security number in order to apply.
If you are a scholarship funding organization, share this article with your candidates so they don’t fall subject to these malicious schemes. You should also note there are many ways fraudsters can subjugate scholarship granting organization’s funds as well. Interception of scholarship physical checks and recreation of check stock and forgery are common in scholarship granting organizations.
To learn more about how fraud could impact your organization and internal controls and prevention, contact us here. You can sign-up for our newsletter here to receive more updates.
Wright Ford Young & Co. is headquartered in Irvine, CA and is the largest single office CPA firm in Orange County. WFY is a full service corporate accounting firm offering audit, tax, estate and trust, and business consulting services to closely held company and family business owners. More information about our Firm can be found at www.cpa-wfy.com.