College students are warned about financial aid scams
Here is a roundup of alleged cons, frauds and schemes to watch out for.
Financial aid — The Better Business Bureau is warning college students and their families to use caution when dealing with companies that promise to help secure scholarships or financial assistance for school. Of particular concern, the BBB said in a recent bulletin, are firms that ask for an upfront fee for help in securing financial assistance. In one recent scam, students were notified that they were finalists for a scholarship but needed to pay a fee to be considered. Rather than pay upfront fees, students should consult with college counselors and financial aid offices for guidance, the BBB said.
Health insurance — Several companies affiliated with a telemarketing scheme that allegedly tricked consumers into buying worthless medical discount plans have agreed to repay some buyers. The Federal Trade Commission had accused the companies of targeting consumers seeking affordable health insurance and getting them to pay for discount medical plans that were not insurance. In a settlement with the FTC, Health Care One, Americans4Healthcare Inc., Elite Business Solutions Inc. and Mile High Enterprise Inc. and their principals agreed to stop the practice and to surrender proceeds from the sale of an Aston Martin, Maserati, a yacht and two motorcycles.
Ponzi scheme — The Securities and Exchange Commission has accused a Northern California investment advisor of defrauding clients by making false statements about returns and how their money would be invested. The SEC said John A. Geringer, who managed GLR Growth Fund in Scotts Valley, Calif., told clients that his fund made between 17% and 25% annual profit when his investments actually were losing money, the SEC said. He also allegedly used new investor funds to pay returns to earlier clients. Geringer raised more than $60 million from investors, most of them in the Santa Cruz area, according to the SEC. The agency is seeking financial penalties, plus the return of allegedly ill-gotten gains.