College students are not a group that immediately comes to mind when we think of “vulnerable” populations but once you start looking at their circumstances it becomes clear: college students need help. Financial control is likely new to most students, it might even be the first time many students pay a bill on their own. Then there are student loans, already a major headache for many. To further complicate matters, many colleges offer financial “products” in conjunction with student ID cards – such as pre-loaded spending or allowing them to be used as charge cards.
With all these students striking it out on their own for the first time we shouldn’t be surprised that there are sharks smelling all that vulnerability in the water. But as with most scams, it isn’t always clear what exactly a scammer is doing until it’s too late. The CFPB is attempting to change that. In a relatively rare move for a government agency (no offense to other government agencies), the CFPB is attempting to figure out what precisely is going on before it becomes a major problem. And with many predicting that student loan debt could be the next “bubble” to burst, the CFPB may be just in time with information about how exactly college student finances work.
It’s easy for banks and other financial services companies to view college students as easy targets. Not knowing what questions to ask (i.e. how high is that interest rate again?) compounded with a real need for many financial services adds up to a free-for-all in the marketplace as inexperienced students attempt to sort the good from the bad. To be fair, many companies might see this as the first opportunity to grab brand loyalty from young people who could potentially be customers for decades to come – so it makes sense to aggressively pursue students as customers. The problem comes when fraudsters or less-than-reputable companies enter the fray and begin offering students “too good to be true” deals.
Earlier today the CFPB announced that it is going to be collecting data about this issue. As the CFPB puts it:
“We want to see if students are getting a good deal and what schools can do to help them through the process. That’s why we need your help. We want to hear about your experience with financial products designed for college students.”
In typical CFPB fashion, they are collecting data from real people who have had real problems. Their analysis will be based on real data and will, hopefully, reveal some real solutions that can be achieved by targeted regulation or enforcement actions.
While the CFPB is still in the early stages of gathering information, there are regulations in place to protect people from the types of financial fraud college students often fall victim to. Has Bank of America (or any other big bank for that matter) been adding a weird charge to your statement that you never agreed to? Or perhaps Wells Fargo has been charging you a fee that you don’t think you should have to pay? Speak up! You may have a legal remedy for such treatment. At the very least, let the CFPB know so they can prevent these things from happening to other students.
Have you been the victim of financial fraud or a scam? Call Berk Law at (202) 232-7550 to discuss your legal rights.