£6.5m paid out on fraudulent student loans
Criminal gangs have targeted the student loan company, costing the taxpayer millions, according to new reports.
The Student Loan Company (SLC) issued 875 fraudulent payments before suspicions were raised. These payments were among nearly 2,450 applications that were considered suspect, according to figures obtained by Radio 4’s You&Yours programme.
A spokesperson for SLC said: “We continually strive to look at ways to make the application process more secure and less susceptible to fraudulent activity ensuring that only those students who are eligible to receive funds are able to access them.”
The money lost has increased from just over £1m last year to £6.5m in the current financial year.
Three times more student loans were cancelled last year owing to suspected fraud than the year before, which is seven times more than in 2009.
Helen Laing, a spokesperson for SLC, said: “We suspect that the rise in organised criminal fraudulent activity is partly down to the fact that the activity has migrated from other businesses and that we have been identified as a new target.”
Laing continued that SLC has a ‘robust system of checks and safeguards in place’. She continued saying: “The higher fraud detection rates have been achieved as a result of new counter-fraud tools and advanced analytical capability. These tools represent an excellent return on investment and will lead to more investment in improved fraud detection and prevention systems.”
In May of this year, thieves who stole £380,000 from the SLC were sentenced. They provided fake exam certificates to applicants who then applied to university and student loans.
The gang charged £1,000 for the exam certificates and then took a cut from the student loan payments. The group received a total of seven years in prison.
In 2011, another criminal gang directly targeted students by sending phishing emails which appeared to be from the SLC asking students to update their personal details.
Instead of the official website students were re-directed to a similar looking site which was controlled by the group.
Hundreds of students across the UK were defrauded in this way, in a fraud that cost an estimated £1.6 million.
Laing said: “In cases where students have had their loan funds stolen, liability is considered on an individual case basis. We do reimburse students where investigation establishes they have genuinely been the victim of a phishing scam.”
SLC commented that students were often targeted at the three main institution dates in September, January and April and that students need to work with the SLC to ensure their identity and financial details are protected and not compromised.
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