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International students victimized in credit card fraud scam

At least thirteen international students have fallen victim to fraudulent tuition payment scams in the past academic year.

All of the cases involve payments made with fraudulent credit cards to student bursar accounts. Miami University Police Department (MUPD) has recorded four instances this spring semester alone, and MUPD Detective Walt Schneider said there is a fifth case that has not been officially reported yet.

As police investigated and these incidents continued to occur, MUPD determined that the students were victims of an international scam.

The scam is orchestrated through WeChat, a Chinese multi-purpose messaging app that includes social media and mobile payment and is used by many of Miami's international students. Scammers contact students through the app and offer to pay their tuition if the students pay them a "discounted" rate for it. The scammers then use stolen credit card numbers to make payments to the students' bursar accounts.

The first four reports total $29,382 in fraudulent payments. Last fall, the other nine reports totaled more than $200,000.

The final deadline for tuition payments is in about a month, so more cases may occur.

Bursar Kristine Cassano said that most payment fraud cases occur in the busiest pay periods, just before payment deadlines.

"It all happens usually at the beginning of fall," Cassano said. "We get a few at the beginning of spring, but fall's the big time because I think that's when everyone knows colleges [start]."

There has been an uptick in these fraud cases in the past year - so much so that the bursar's office restructured so that someone on staff is now responsible for looking into suspicious activity on student accounts, Cassano said.

The scammers make multiple payments to the student accounts, never more than $4,000 to $5,000 at a time, and usually not less than a few hundred dollars, Cassano said. Multiple bounced payments within a short period of time on a student's account is a red flag, as well as a name on the credit card that does not appear to have any relation to the student.

The credit card numbers are stolen from real people, usually using skimmers, which are small devices placed in gas station pumps and ATMs that read and store the information off the magnetic strip of a card when it is inserted into the machine. These numbers are then sold on the dark web.

"They can use that same information to generate a whole new credit card that can be physical with the numbers imprinted on it," MUPD Detective Lieutenant Jim Bechtolt said. "Or just the data that you could [use] online.

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MUPD has been able to track several of the scammers' IP addresses back to a VPN server located in California, but it's likely that this VPN is accessed remotely from another country, Bechtolt said.

Schneider said that in cases like these, MUPD often has to work with the FBI, which deals with crime across state lines, Homeland Security, which tackles international crime, and the Secret Service, which takes on both.

Miami is not the only college dealing with this issue. Cassano said she believes higher education is becoming a more prominent target to these kinds of scams.

"There are other universities out there that are falling victim to the same problem," Schneider said. "Other universities could be experiencing the same thing locally, but the Secret Service said that locally out of the Cincinnati area we were the first ones to notify them of this particular issue."

Because the students are the victims in these cases, they are not being prosecuted; however, they do lose out on the money they pay to the scammers. That money cannot be refunded until the perpetrators are caught.

The university does not lose any money in these scams, but third party Tuition Management Systems (TMS), that Miami partners with, do. Miami routes its tuition plans through TMS, so technically students pay TMS, and then TMS pays Miami. With these scams, TMS must pay fees to reverse fraudulent transactions.

MUPD is continuing to work with other agencies to find the source of the scams but is running into problems due to the fact that China does not have to comply with MUPD's subpoenas.

"Right now, I would say our biggest thing is working to educate the students not to fall victim to these scams," Schneider said.