How To Avoid the Financial Hardship Department Scam

Is the Financial Hardship Program Legitimate?

There is no official United States government agency or organization called the “Financial Hardship Department.” But with credit card debt reaching an all-time high of $930 billion, unrelenting scammers want you to believe that such an entity exists [*].

Over 70% of American adults admit to being stressed about their dwindling personal finances — especially in comparison to pre-pandemic days [*].

Unfortunately, this makes them sitting targets for scammers who prey on disconsolate borrowers in search of debt relief.

Scammers track down vulnerable consumers and dangle fake hardship assistance — special forbearance or relaxed interest rates — in order to steal personal information.

In this guide, we’ll explain what the Financial Hardship Department scam is, what to do if you receive a scam email or call, and how to know if you’re dealing with a scammer.

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What Is the Financial Hardship Department Scam?

The Financial Hardship Department scam is a phone or email scam that claims to extend financial relief to you, while disguised as a government agency or financial institution.

The goal is usually to prise personal information such as your Social Security number (SSN) — or to have you click on a malware-laden link, infecting your device.

While these scams often follow a similar pattern, fraudsters employ different tactics each time. You might be offered student loan forgiveness, an assistance program, credit repair, or a pre-approved loan. Here’s how these scams generally unfold:

• You receive a robocall or email about a pre-approved debt relief loan. You’re contacted and told that you’re pre-approved for a financial assistance loan (typically $37,000). Be cautious, even if it sounds like you’re talking to a real person; scammers have begun using AI voice clones to make their schemes seem more convincing [*].
• To claim your loan, you’re asked to contact your representative or download and complete a form. Since your case has an alleged “pending” status, you’re asked to contact an assigned representative in order to confirm eligibility. However, legitimate financial institutions and government websites do not elicit personal information without verifying your identity first.
• Once you call the number, you’re asked to provide personal information and pay an upfront fee. The caller requests information such as your name, address, and SSN — all of which can then be used to open fraudulent, new accounts in your name. They might also request a “fee” (to process your application or begin the relief process), which is pocketed by the scammer.
• If you download any attachments, they will infect your device with malware. The goal of many of these types of scams is to entice you into downloading an attachment that contains hidden malicious software. You might be asked to download and fill out a form or loan agreement — when, in fact, you’re giving the scammer access to your device.
• The scammer gains access to your device, documents, and other personal information. With direct access to your device, thieves are able to open, corrupt, move, and even erase sensitive files and other documents. If you have any personal information stored on your device — as most people do — you may be at risk of potential identity theft and fraud.

With American households holding more than $16 trillion in debt, it isn’t hard for scammers to find a few compliant victims [*]. The Federal Trade Commission (FTC), for instance, is sending more than $3.3 million to 37,844 debtors who were fleeced by Arete Financial Group [*]. 

Like most illegal student loan debt relief schemes, Arete Financial Group falsely promised to eliminate or substantially reduce monthly payments. But they never delivered, leaving borrowers worse off than before.

📚 Related: How To Opt Out of Prescreened Credit Card Offers →

What To Do If You Receive a Financial Hardship Department Scam Email or Call

Receiving emails that cite unfamiliar debts or debt relief loans from a “Financial Hardship Department” can be unnerving for most people. And if you’re not familiar with common scam tactics, you run the risk of falling victim to one of these schemes.

Here are five proactive steps that you can take if you’re receiving these type of emails or messages:

1. Look for signs of phishing
2. Screen unknown callers
3. Do not disclose your personal information
4. Report any potential impersonation
5. Protect your devices and identity

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1. Look for signs of phishing

Phishing emails — ostensibly from the government, your bank, or even a coworker — are designed to steal your personal information. While scam emails closely resemble official emails from companies that you know and trust, there are often telltale signs.

How to tell if an email is from a scammer:

• The sender’s “From” name and email address don’t tally. Email scammers can update an email header’s From, Reply-to, and Return-path sections to masquerade as “U.S. Department of Financial Hardships.” But, if you click on the sender’s name, it will reveal the actual email address that is being used to send the message. If the email address and name don’t match, it’s a scam.
• The message is sent from a free or consumer email address (Gmail, Yahoo, etc.). Legitimate government agencies use official, branded email addresses that end with .gov.
• The message features mangled grammar or strange formatting. Messages and emails sent from actual government agencies undergo a certain level of appraisal before they are sent out. If you’re seeing strange errors, consider this a red flag.

2. Screen unknown callers

Getting a slew of unwanted, unknown phone calls can be concerning, not to mention aggravating. And some scammers rely on spoofed phone numbers to present false caller information that helps mask their identities. 

Using a spam blocker or similar tool can help filter these types of scam calls. If a caller is unknown or not included in its spam lists, Aura’s proprietary AI Call Assistant will answer the call on the user’s behalf to screen it for spam. Aura’s filters also look for suspicious links in text messages.

3. Do not disclose personal information

If you receive a call you’re not expecting that displays an unknown caller ID, never give out any of your information — even your name — until you verify that any callers are who they say they are.

How to verify a caller or sender’s identity:

• Ask questions, or ask to call them back later. Real companies — especially those that handle finances — will welcome any questions you may have. Scammers, on the other hand, will be circumspect in their solicitation and pressure you into taking swift action. If you’re unsure about someone’s identity, simply hang up and contact the company by calling its official number.
• Do a reverse number search. A reverse number search can help you identify the person or company from whom you’ve received a call. Some phone number lookup services also flag numbers that may have been reported as being used by scammers.

4. Report any potential impersonation

Any messages or calls you receive that you believe to be fraudulent should be reported to the FTC at: ReportFraud.ftc.gov. 

If you have encountered phone number spoofing, contact the Federal Communications Council (FCC) by completing this form or by calling 1-888-225-5322. 

Your phone provider may also have spam call-blocking features or apps. T-Mobile’s Scam Shield, AT&T’s ActiveArmor, and Verizon’s Call Filter are a few common examples.

If scammers are found to be impersonating a legitimate company, be sure to alert the company in question. This allows them to promptly inform other customers; the company may even issue an official statement.

📚 Related: How To Avoid the Credit National Assist Debt Relief Scam →

5. Protect your devices and identity

Digital security providers that offer identity monitoring and online safety tools protect you from these kinds of fake relief scams and more.

Aura’s identity theft protection offers personal and financial information monitoring for you and your whole family.

• Credit and account monitoring. Since most scam calls have obvious mercenary motives, your bank and credit card information may be at risk. Aura monitors your bank accounts and credit reports — notifying you of any suspicious new transactions or inquiries.
• A full suite of digital security tools. Every Aura plan comes with a password manager, virtual private network (VPN), powerful antivirus software, and Safe Browsing tools that can further protect you from spam sites and online phishing scams.
• AI-powered Call Assistant. The best way to avoid getting scammed is to avoid engaging with spam calls altogether. Aura’s Call Assistant screens incoming calls and only forwards those that are legitimate.

How To Tell If You’re Dealing With a Scammer

The Financial Hardship Department scam and other similar scams are effective because fraudsters pose as government agencies that may appear real at first glance. These scammers prey on people in vulnerable positions by offering too-good-to-be-true deals.

There are usually several signs indicating that an individual or organization is a scammer. These include:

• Unsolicited robocalls. While robocalls aren’t illegal, companies can’t use them unless you’ve explicitly given them permission to do so. A robocall from a company that you don’t recognize is both illegal and likely a scam.
• Loan offers for which you never applied. Don’t believe anyone who offers you a loan out of the blue. Before you can borrow money, most loan providers perform a credit check and require you to fill out an application and/or verify your identity. If you’re not asked for any of this criteria upfront, you can assume the “loan” is actually a scam.
• Unknown sender or caller. Getting a message or call from a stranger isn’t always cause for concern, but it’s a sign to proceed with caution. Phone carriers with call labeling services may display such incoming calls as “Scam Likely” or “Spam.”
• Insistent requests to “verify” sensitive information. You might be asked to confirm your account numbers or reveal your complete SSN. This isn’t characteristic of legitimate organizations — especially over the phone.
• Demands to pay upfront fees for government aid or support. Most government aid, like Supplemental Nutrition Assistance Program (SNAP) and unemployment benefits, are paid for by taxes from citizens. You’ll never be asked to pay to receive aid.
• Pressure to click on a link or download an attachment. Both phishing and smishing (SMS phishing) “fish” for a response and require an action before you can be affected by the attack. These messages flag an issue with your bank account or a transaction — when there isn’t one. Scammers may even alert you of payment problems — when there are none.
• A caller who doesn’t seem to know much about you. Remember, they called you. If a caller uses a generic greeting or isn’t able to produce any details about you, you’re likely just one of many potential victims that they’re trying to ensnare.

Did You Give Up Personal Information or Click on a Link?

Answering a spam call or opening a scam email does not by itself put you in danger. The real peril lies in surrendering your personal data. Any information — even your name, address, or account details — can put you at risk of identity theft, fraud, and hacking.

If you gave up personal information over the phone, here are some steps you can take to secure your accounts:

• Freeze your credit with all three bureaus. A credit freeze stops potential lenders from offering you new credit or loans by preventing access to your credit reports. To freeze your credit, contact each of the three credit bureaus individually — Experian, Equifax, and TransUnion.
• Update your passwords, and enable two-factor or multi-factor authentication (2FA or MFA). Create unique passwords for each of your social media and online accounts. Aim for at least 12 characters, and use a password manager to keep track of them. If available, use 2FA or MFA as additional methods of authentication.
• Run an antivirus scan to check for malware. If you clicked on a link in a message that you now suspect is spam, you’ll want to run an antivirus scan to check for malicious software that may have been downloaded to your device.
• Back up your files to a secure location. Once scammers install malware on your device, they’ll be able to access, corrupt, and even delete your files. Copy all of your important documents and information to a secondary location. Cloud-based storage is generally more secure than local storage.
• If needed, obtain legitimate tech support. Enlisting a professional to examine and clean your devices can help ensure that malware hasn’t eluded an antivirus scan.
• Consider signing up for identity monitoring. Scammers can use voice cloning to mimic your friends or family members. Shockingly, 70% of adults are not confident in their ability to distinguish a cloned voice from a real one [*]. Aura not only safeguards your identity — but also prevents scam calls from reaching you in the first place.

Predatory Debt Relief Scams Are Everywhere — Aura Can Help.

Scammers prey on people burdened with financial difficulties, and pose as representatives or organizations offering help. The most effective step that you can take to stay safe is to disregard unknown phone calls and emails.

If a message is legitimate or important, you can expect the caller to follow up by using a different contact method.

Should you find yourself spritzed with scam calls and emails, consider Aura. Aura monitors your identity and financial accounts, mitigating damage even if you become a victim of one of these schemes. 

Every Aura plan includes three-bureau credit monitoring and advanced digital security tools  — all complemented by $1 million in insurance coverage and 24/7 U.S.-based customer support.

Keep your finances and identity safe from scammers. Try Aura free for 14 days.