FTC warns students of national scam
Campus Times
September 19, 1997
The Federal Trade Commission (FTC) warns college students that advertisements
claiming "free financial aid services" may be a scam. These advertising
companies run ads with misleading statements offering students good seasonal
jobs with great pay and scholarships.
"They are outrageous pranks when they say millions of dollars in
scholarships and financial aid goes unclaimed and are out there," said
Nadine Samter, an FTC attorney for eight years. "Money is much tighter
than people really claim."
In a book students must purchase is a list of available scholarships,
but there are eligibility requirements for the scholarships that the companies
hold back.
They also advertised summer job opportunities, including jobs on cruise
ships and other travel companies for high pay. What they fail to mention
is that consumers must buy books that can cost hundreds of dollars.
"These companies misrepresented the scholarship," said Samter.
"The vast majority of the scholarship most people were not eligible.
You had to be of a certain gender or race or taking a certain major."
According to Joe Lipinsky, FTC attorney, these fraudulent companies
printed ads offering money back guarantees, but when the consumers requested
it back, the companies sent them through loop holes to get it. They had
to prove that they applied to a certain amount of scholarships.
"We (FTC) consider them a fraud," Samter said. "They
make it sound like a cool job and it's not. They do not mention that they
are selling books."
The FTC finds cases either through consumer complaints, competitors
who squeal on other competitors, or through an FTC attorney who comes across
something suspicious.
Two Seattle, Washington-based companies, Progressive Media, Inc. and
Collegiate Communications Group, Inc., and their principle officers have
been ordered to pay an estimated $288,000 into a redress pool. Partial refund
will be made to those who paid $39.95 to $69.95 for either high-paying summer
jobs in the Alaskan fishing industry, on cruise ships, or for scholarships
and other financial aid.
One sign of a scholarship scam includes is the company claiming that
"the scholarship is guaranteed or your money back." Refund guarantees
usually have strings attached.
Samter suggested to be aware of ads that say, "You've been selected
by a national foundation to receive a scholarship" or "You're
a finalist" in a contest you never entered. Make sure the foundation
is legitimate.
The scholarships that cost money are the major scam. Free money should
not cost anything.
The FTC also warns students to not give out credit card or bank account
numbers to hold a scholarship. It is a definite set-up for an authorized
withdrawal.
One sure way for University of La Verne students to receive scholarships
the legitimate way is to go to the Financial Aid Office or the Wilson Library.
Both hold many free lists of scholarships. The information is free.
The ULV Financial Aid Office would not comment on the alleged scam.
