Why Fraudsters Are Targeting Global Citizens


It doesn’t take long for fraudsters to find new vulnerabilities in payments — and when they do, all bets are off.

In recent months, there’s been more instances of students falling victim to scams that seek to trick them out of the tuition payments intended for overseas institutions.

These global citizens have become a huge target for fraud.
When you think about it, it actually makes sense why fraudsters have their eye on cross-border tuition or health care payments.

Peter Butterfield, chief compliance officer for Flywire, pointed out that the low-volume, high-value payments are being sent by people who are likely to be unfamiliar with the payments ecosystem of the country where their payment is being sent and unaware of the potential risk involved.

It’s because of this that Flywire has expanded its role to be more than just a cross-border payment provider, but also a payment company that can help handle and mitigate the growing threat of fraud to the institution clients and payors it serves.

The Ever-Growing Target

When it comes to cross-border tuition fraud in particular, Butterfield said fraudsters have the opportunity to take advantage of a widening pool of young, vulnerable people who are studying outside of their home country, uncertain of host country laws related to payments and immigration/visa status and likely living abroad for the first time. Because these students are embarking on an uncertain time in their lives — studying and living in a foreign country — they are more likely to trust someone who speaks their native language or looks like them versus an unfamiliar payments company.

In many cases, they unknowingly end up trusting individuals who are actually just out to scam them out of their tuition payments.

Students believe they are paying an intermediary who is then going to pay the institution, but instead they become yet another victim of tuition fraud.

Not only are scammers posing as trusted partners of universities to trick international students into handing over their payments, they also go as far as pretending to be a representative of the government of the country in which a school is located.

Fraudsters then contact international students, posing as government officials or representatives from a government agency, to notify them that they failed to pay a specific immigrant or visa tax. While these requests are completely bogus, Butterfield noted that students can be easily tricked by a communication coming from the country’s “government” stating that they could potentially lose their right to stay if they do not pay immediately.

However, Butterfield said there is a silver lining to the cloud of tuition fraud.

He explained that Flywire is building up close relationships with client institutions and payors in an effort to establish an open line of communication and reporting of fraudulent attempts to defraud students.

Why Training and Education Are Key

This particular type of cross-border fraud is a hard one to beat.

The best line of defense for protecting both institutions and students, Butterfield explained, is training and education to detect patterns of fraudulent payment behavior.

“There are people out there who falsely claim they are acting on behalf of the school. What we try to do is make sure that the schools are able to reach a broad audience to promote safe payment services that are authorized by the institution like Flywire,” he said.

This means providing students not only with explicit directions and information on how to use trusted and verified payment services, but also a safe space to report when they’ve fallen victim to malicious ones.

“We spend time educating both the international student payment offices as well as the payor community on how to be taking steps to verify that money is being paid and trusted to a trusted party of the school,” Butterfield stated.

However, in many countries from where global citizens hail, there is a culture of shame in place that make them reluctant to share when something bad happens to them, such as losing their entire tuition payment to a scam.

Butterfield said Flywire is working with and recommending to its institutional clients to communicate to both students and their families that there is a no-judgement number or resource in place to help them if they do in fact become a victim of tuition fraud.

Flywire has also started working with authorities and governments in certain countries to help coordinate efforts to alert people in areas and communities where there might be a large student population that could be at risk due to this illicit behavior.

“What we’re finding is that we have to keep broadening the number of people and additional resources involved, whether we are working with the schools or with the students, and now we are working with government authorities and police officials — it’s extending out as the constituents grow,” Butterfield noted.

Handling Expanding Risk

Unfortunately, international students are not the only population who must remain vigilant against these cross-border fraud attempts.

Other markets, such as health care, may also be at risk. Butterfield noted that the risk may become even higher because the fraud is operating in different industry verticals, with some being a little more prone to fraud than others.

“One of the other things we see that’s perhaps more unique to education and health care than other areas is that it’s not just money moving, but it’s people moving also. If someone is going to be a patient or moving to another country to get a service, there are material issues involved around visas and the ability to stay,” he explained.

“It’s just that much more acute when people are moving from one area to another,” he added.

This situation can easily result in global citizens being manipulated into submitting payments to fraudsters for what they think is necessary to stay in a foreign country.

Butterfield said that to combat this, Flywire is taking the lessons it has learned in fighting tuition fraud and applying that knowledge to other industry sectors as well.

While there are best practices of which receiving institutions should be aware and they need to communicate effectively to the people sending them payments, Butterfield also suggested that these institutions work closely with their credit card processors to help develop risk profiles and patterns of behavior that will allow for more closely targeted fraud detection.

“I honestly think a lot of what these institutions are looking for is a solution, and they look to us to be more than just ‘Here’s your money.’ They’re looking to us for best practices and to partner with them to protect their paying constituents from fraud,” he said.

“It’s really about a lot more than just making sure the money arrives safely, although that’s the number one priority.”

For this reason, Butterfield pointed out that compliance has become a deal closer and difference maker for many of the clients with whom Flywire works. It’s no longer just a must-have but also an attractive selling proposition.

“It’s hard to stay one step ahead of people who are trying to cheat or deceive honest people who mean well,” he explained. “As we add more currencies and methodologies of payment, there’s just another whole set of behavioral patterns to get our arms and minds around.”

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