5 Frauds in the Education Sector and How They Can be Prevented
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Educational institutions have become an attractive target for cybercrime attacks in recent years. World-renowned Michigan State University, Columbia College Chicago, and Utah University became the target of a wide-scale ransomware attack called Netwalker in August 2020, whereby millions had to be paid to the criminals. A similar incident took place in March 2021 as well, where the University of California was targeted by a criminal gang that stole the personal data of students and threatened to leak it over the internet.
The more worrying data breach cases are where the safety of the students is compromised, and according to the Better Business Bureau’s Scam Tracker Risk Report, youth in the age group of 18-24 years are the most vulnerable to such frauds.
This blog will shine a light on how criminals target educational institutions, how fraudulent students manipulate educational institutions, and what can be done to improve the situation.
What Frauds Take Place in the Education Sector?
According to recent studies, fraud costs the education industry at least $70 million globally. Common frauds and cyberthreats in this sector include child identity theft, fake scholarship scams, student loan fraud, social engineering attacks and ransomware.
1- Malware Attacks
The sudden shift towards the remote learning model made the situation much worse. As more and more students began using their personal devices and unsecured networks to join classes online, stealing their data for financial gains became even easier. According to Microsoft Security Intelligence, the education industry was the most affected by cybercrimes in 2020, encountering almost 64% of all malware attacks. Since the Social Security Number is commonly used as a student ID in schools, such attacks can lead to child identity theft, synthetic identity fraud, and even the sale of SSNs, birthdates, and other crucial information on the dark web. With the pandemic showing no signs of slowing down and studies proceeding online, it’s high time this sector began investing in effective cybersecurity technology.
2- Social Engineering Attacks
Cybercriminals are increasingly turning towards social engineering tactics to exploit the ongoing health crisis. These attacks involve psychological manipulation for convincing vulnerable individuals into revealing sensitive information. For instance, the Washington Post recently issued a warning against a phishing scam where the criminals were posing as legitimate entities and asking recipients of fraudulent emails to submit information regarding their COVID-19 vaccination status.
In terms of the education industry, such attacks are on the rise. Between June and September 2020, Barracuda researchers evaluated more than 3.5M phishing attacks and found that 1000+ schools, colleges, and universities were at the receiving end of phishing attacks. It was also found that educational institutions are twice more likely than other institutions to be exploited by social engineering attacks.
3- Identity Thieves, a Bigger Threat than Before
One of the most prevalent reasons why criminals target educational institutions is because it makes a hotspot for facilitating identity theft. Once a data breach or phishing attack has been executed, stolen information is acquired, which can then be used to attain illegal financial gains. For instance, a child’s legitimate information can be combined with fake data to forge a completely new identity. This phenomenon is commonly known as synthetic identity theft and is currently one of the fastest-growing financial crimes worldwide.
Another reason why identity fraud is a major area of concern in the education sector is that the information can be sold on the dark web. Personal details of students, including their SSN and mother’s maiden name, have long been sought after by criminals to commit financial crimes. Once the data is leaked on the dark web, a child’s identity is not just lost, but criminal acts can be committed under their name. This can lead to wrongful arrest, a ruined credit history, and an inability to apply for loans.
4- Student Loan Fraud
On the flip side, students often exploit benefits provided by their schools or colleges to gain illegal privileges, such as financial aid. A student loan fraud is said to have occurred when a child misrepresents the income status of their family while filling the application form, uses someone else’s identity to file for aid, or falsifies identity and academic documents to qualify for financial support. Penalties for student loan fraud are fairly high, ranging from heavy monetary fines to imprisonment up to 20 years.
In a recent event, Feds in California revealed that more than 65,000 fake students had applied for financial aid at various community colleges. This incident is being dubbed as the state’s biggest financial aid scam in recent history and was executed through fraudulent email addresses, phone numbers, date of birth, and residential addresses.
5- Fake Scholarships
Similar to what is discussed above, identity and financial documents can be manipulated to acquire scholarships as well. On the other hand, bogus agencies often exploit students by providing them with fake scholarships. This type of scam can take several forms, such as scholarship offers made to students via phone calls or SMS, or through the use of websites that offer limited-time deals for a guaranteed scholarship. In such scenarios, it is very likely that the scammer is attempting to steal credit card or bank account information from the student.
According to 2021 statistics, 43M Americans owe at least USD 36,000 in federal loans, making students a vulnerable target for scholarship scams. Addressing this issue, Sean Heardrick with the Better Business Bureau stated, “We’re seeing scammers come out and offer scholarships and loans to students that aren’t real. They look fantastic, but when they go to apply, they’re only trying to get your information. Students have a hard time paying tuition and college is expensive these days,”
Tips for Securing Educational Institutions
With the strategic use of automated solutions, the aforementioned challenges to the education sector can be effectively managed. Here are some tips that provide practical solutions:
- Use of automated solutions to safeguard online databases, student portals, and academic records
- Invest in an AI-powered identity verification solution to detect fake identities enrolled in the student database
- Avoid opening suspicious links and websites as they may be phishing scams
- Use document authentication solutions to verify the ID documents of students prior to providing student loans
- Replace passwords with facial verification technology for maximum security
Gain more information about solutions to fight fraud in the education sector by talking to our experts.
