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Student fraud scams

Discover five common scams among students, what red flags to look for and how to protect yourself from danger

10 min. read

It’s no secret that your education is an essential building block for your future success (be honest, you probably hear it from your parents or teachers all the time). While subjects such as science and math are important, something they don’t always teach you in school, which is equally important, is how to keep your finances safe.

You may already know the basics – never open sketchy emails, don’t share your bank account information, and avoid using the same password for multiple accounts – but with an increasingly evolving fraud landscape, your fraud prevention knowledge likely needs some updating.

“Young people now may be much more tech savvy than previous generations, but many are unaware of just how rapidly cybercriminals evolve their tactics to target them,” says Larry Zelvin, Head of the Financial Crimes Unit at BMO Financial Group. “Fraudsters are always devising increasingly complex methods to deceive their victims; for that reason, it’s crucial that young people stay vigilant and well-informed.”

The Better Business Bureau footnote 1 recognizes that scammers often target students, as they are required to make a series of purchases that may include tuition, school supplies, and living-related expenses. Below are scams you may encounter as a student, and steps you can take to protect yourself and your finances. 

Rental scams:

Looking for a place to live, either with friends or on your own? Rental shopping can be challenging. Demand is high, selection is limited, and on top of that, you must be mindful of your budget. Fraudsters often take advantage of these factors, frequently playing on a student’s need for urgent accommodations to extract money or information from prospective student renters.


You find an online ad with photos of a student rental that catches your interest, leading you to contact the landlord for more details. Before you’ve had a chance to visit the property in person, the landlord asks you to pay a deposit to be considered as a potential renter. However, after paying the deposit (typically by wire transfer or check), you discover the landlord was advertising none other than a phantom rental – a property that is not available to rent or perhaps never existed at all. The fraudster disappears with your money, and you are left with no accommodations.

Red flags to look out for:

  • The landlord demands a payment or your banking information before you have viewed the property or made a formal agreement
  • You receive photos or details about a rental without having requested it – unsolicited information is often a sign of a scam
  • The landlord avoids your questions about the property and is pressuring you to sign a lease quickly
  • The rental rates being offered by the landlord are well below current market rates                        

How to protect yourself:

  • Trust your intuition – is the deal too good to be true?
  • Always personally view the property before signing or paying for anything
  • Do your research to learn about the current rental market in your area
  • Be cautious when looking for rentals on online marketplaces, as these platforms are typically open for anyone to post, and advertisements are not pre-screened
  • Do not pay out any additional fees such as application fees, holding fees, pet deposits, etc. Landlords can only legally request last month’s rent and a refundable key deposit at the time of signing the lease
  • Speak with current tenants if possible – currently occupied units are less likely to be fraudulent

Financial aid scams:

Funding your education is expensive and can often require some external support. While you should make use of all the resources at your disposal, be cautious when applying for financial aid from unfamiliar sources, as fraudsters may be lurking behind fake scholarship or grant postings to obtain sensitive information from unsuspecting students.  


When searching online for scholarships to help cover your tuition, you come across a website claiming to offer financial aid packages for varying levels of need. The application requests your chequing account information to confirm your eligibility, but your details are used by scammers to debit your account without your permission.

Red flags to look out for:

  • Any upfront fees, such as a registration, entry, or administration fee
  • The application asks for your credit card or banking information
  • The website lacks contact information or other details about the provider or organization
  • The provider or organization claims to guarantee scholarship support – legitimate scholarships are based on merit or a combination of merit and need, and thus are never guaranteed
  • You receive an offer for a scholarship you never applied for

How to protect yourself:

  • Be skeptical of unsolicited scholarship offers
  • Avoid services that require payment or financial details to determine eligibility
  • Do your research on the organizations you are considering for financial support
  • If possible, contact your school’s financial aid office for advice or clarification on your support options
“Something they don’t always teach you in school is how to keep your finances safe.”

Employment scams: 

Job hunting can be challenging, especially when you are just beginning your search. The number of job postings out there, many of them asking for qualifications you don’t have just yet, can feel almost limitless. Whether you’re looking for a summer job or a full-time gig, keep an eye out for fake job postings that may appear enticing at first, but turn out to be a front for fraudsters tricking job seekers out of their money or personal information.


You’re browsing a credible job search website when you come across a job posting offering flexible working hours or high wages requiring little to no experience. The application process is quick and easy, you’ve landed the position before you know it, but then they ask you for money to cover your supplies or training for the job. Once you’ve paid it, you never hear from “your employers” again.

Another common employment scam is the money mule scam. In this case, you receive payment for doing things such as transferring money or opening a bank account. It may seem like easy money, but even unwittingly performing this kind of job could amount to your participation in a financial crime. 

Red flags to look out for:

  • An overly simple job interview process or no interview at all, perhaps requiring only an online application
  • The employer avoids questions about experience requirements and refuses to provide details about the position
  • The employer asks you for personal details like your date of birth, bank account information, or SSN before you’ve secured the job
  • Poorly written or vague job descriptions
  • Any promises of “easy money”

How to protect yourself:

  • Do your research on the employer – is the company reputable?
  • Validate the legitimacy of job postings by checking on the company’s official website
  • Never send money – a legitimate employer won’t charge you to apply for a job or to participate in training
  • Avoid jobs that involve receiving and forwarding funds

Shopping scams:

Who doesn’t love the convenience of online shopping? Today, you can buy just about anything your heart desires from the comfort of your own home. However, online shopping has also opened more opportunities for fraudsters. According to the U.S. Federal Trade Commission, online shopping scams were the second-most common fraud category reported by consumers in 2021.2 For this reason, it’s more important than ever to avoid impulse purchases and ensure that your wallet is protected. 


You’re browsing online for a specific product when you spot it listed on an unfamiliar site at a fraction of the original price. It seems like a great deal, right? Jumping at the chance to save some money, you decide to place an order. However, the item you purchased never arrives; instead, fraudsters have your credit card and personal information.

Another common scam has emerged from the buy-and-sell marketplace, in which fraudsters pose as sellers on legitimate classified platforms and advertise items at bargain prices. When you show interest in buying, the scammer may claim to be travelling and indicate an agent will deliver the product after payment is received. You may even receive an email receipt from the seller’s payment provider, convincing you that the transaction will be fulfilled. Unfortunately, your item never arrives, and your seller is unreachable.

Red flags to look out for:

  • The website asks you to pay using a money order, pre-loaded gift card, or wire transfer, or does not support payment through secure payment services such as PayPal
  • The product is advertised at an unbelievably low price or claims to have outstanding features that seem too good to be true
  • The website has limited information about delivery, returns, and other policies
  • The website lacks contact details or has a customer service email address that appears to be a personal one (e.g., ends in
  • The “buyer” pays you more than the price that you agreed on; they immediately request reimbursement for overpayment, but their original payment never clears
  • If the transaction involves unusual shipping, processing, or customs fees

How to protect yourself:

  • Stick with familiar vendors; well-known companies present a lower risk of fraud
  • Compare prices with other online sellers and be wary if the same item being offered at a steep discount on one website isn’t being priced similarly elsewhere
  • Make smart check-out decisions: use secure payment services only and look for URLs starting with https:// and a closed padlock symbol, meaning the website uses encryption to protect your data
  • If possible, use mobile payment apps or digital wallets like Apple Pay and Google Pay, which are more secure than directly entering your card details due to their tokenisation mechanism designed to prevent credit and debit card fraud online
  • Do your research: read the reviews, both on the website itself as well as elsewhere on the Internet, and check the vendor’s refund and returns policy
  • If shopping from a reseller of goods, check to see whether the store is authorized to sell the brand’s products
  • Avoid shopping online using public Wi-Fi connections

Investment scams:

You’ve earned some money and now you want to start putting it towards your future – a good idea, and a popular one too. Approximately 80% of young people are now investing their money for the years to come3. However, with the anonymity of social media and the growing popularity of untraceable investments like cryptocurrency, investment scams are on the rise. Always do you research or consult with a trusted financial advisor before investing in your money.


You get a message from someone you consider a friend on social media, pitching you an investment opportunity. They promise you high returns and even claim to have made thousands of dollars investing in it themselves. It all sounds good, but once you invest, you realize your money has disappeared – and that “friend” you thought you had been talking to is actually a fraudster who hacked into their social media account to take advantage of your trust.

Red flags to look out for:

  • You are contacted out of the blue with unsolicited investment advice, whether it be from a stranger or a friend
  • The individual uses high pressure tactics to convince you to buy or you are told you need to act quickly, or the opportunity will pass you by
  • You are told you are being given insider information to entice you to join an “exclusive” in-group
  • The opportunity sounds too good to be true: it is described as low risk, yet with fast and high returns

How to protect yourself:

  • Be skeptical of investment opportunities offered on social media, even if it’s a recommendation from what appears to be a friend
  • When in doubt, don’t click on any links sent by others
  • Do your own research on investments and invest only through reputable sources
  • Never transfer money to others online to invest on your behalf

The bottom line:

Being a student could put you at risk for certain scams that are difficult to detect, and it’s important to be aware of the warning signs to avoid becoming a victim. If you suspect that you may have been scammed or observe unusual activity in your bank account, contact your bank immediately and report to the Federal Trade Commission (FTC). 

Check out BMO Security Center

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  1. Better Business Bureau, Scam Alert: 6 scams for college students to avoid.
  2. Federal Trade Commission, New Data Shows FTC Received 2.8 Million Fraud Reports from Consumers in 2021.
  3. The Motley Fool, 80% of young people now invest: here’s where Gen Z are stashing their wealth.