By Shefali Kapadia
As college students return to universities for the fall semester, a payment scam is lurking on campus.
Fraudsters are stealing identities or creating fake ones to create “ghost students.” These false identities apply for financial aid from a university or through the federal government. If the fraudster successfully bypasses university or government verifications, payments are disbursed and start moving through the financial system.
“That’s where financial institutions really become a critical line of defense,” said Crystal Trout, a managing director focused on financial crime compliance in the tax and accounting firm Baker Tilly’s risk advisory practice. “The fraud has already happened, but it hasn’t ended.”
