Scam Alert: New Fraud Targets College Students Over Income Taxes Skip to main content

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Scam Alert: New Fraud Targets College Students Over Income Taxes


North Carolina students

Students victimized in new tax scam

Image Source: Flickr CC User Francisco Osorlo

We’ve written before in our North Carolina scam alerts about tax scams, but today’s fraud notice reveals a new twist on an old tactic, and it involves college students. North Carolina college students are being targeted by IRS imposters and scared into paying big money. Here’s what you need to know.

How the Fraud Works and What to Watch For

As with so many scams, it starts with a phone call. NC college students are contacted by an “IRS agent” and told they owe past-due taxes and must pay up ASAP. But the tax that the fake collectors are calling about doesn't even exist.

The scam caller insists they are collecting a “federal student tax." Some calls have reportedly stated this tax is tied to student loans and have threatened legal action, arrest on criminal charges, or the loss of college degrees or student status if not paid immediately.

The North Carolina Department of Justice Consumer Protection Division has reported a number of complaints from NC college students. Some of the students were so scared they paid out cash – in one case nearly $4,000 was sent to scammers.

10 Things You Need to Know about This Scam

#1 There is NO SUCH THING as a “federal student tax.”

#2 Taking out student loans does not trigger a tax.

#3 Your college degree cannot be taken from you for unpaid taxes.

#4 The IRS does NOT call people demanding instant payment.

#5 Tax notices are delivered only via US Mail.

#6 No government agency will demand payment via Western Union, iTunes, or gift cards.

#7 The best thing to do with a scam call is hang up immediately.

#8 Scammers rely on fear to scare you into paying – don’t buy into it.

#9 Debt cannot send you to jail.

#10 You should report scam calls to help spread the word and protect others.

Why Scammers Target College Students

Fraudsters like to target people they can scare, and fear is often based on a lack of knowledge and experience. College students often don’t have the life experience to know they’re being scammed and may act out of panic.

Scammers also target those who are financially vulnerable, like students, low-income consumers and seniors. The elderly are another frequent target because they may be easier to scare, particularly if the scammer threatens family members.

How to Report a Scam to the North Carolina Department of Justice

If you receive a scam email, letter or phone call, you should report it to the NC DOJ promptly. Not only can this prevent other NC consumers from being taken advantage of, but it may allow the Department of Justice to locate the scammers and shut them down.

Even if you don’t think you have enough information to help, it may be enough to fill in gaps in an existing investigation, so don’t hesitate to report a suspected scam whether you paid money or not.

You can call the NC Department of Justice scam hotline at 877-5-NO-SCAM or go to www(dot) If possible, get the phone number from your caller ID, and if you are given a callback number, share that too. Any information you can provide may be helpful for stopping scammers in our state.

Deep in Debt? Consider a Bankruptcy Solution

If you’re in a vulnerable position because of debt and sick of panicking every time the phone rings, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Get the financial peace of mind you deserve.

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