Maybe you’ve seen something like this:
“Because you pay your income taxes on time, you have been awarded a free $15,000 federal government grant! To get your grant, simply give us your checking account information, and we will direct-deposit the grant into your bank account and even waive the processing fee!”
Don’t be fooled.
Sometimes an ad will claim that you qualify to receive funding appealing to your want of free money to pay for the cost of schooling,renovations to your auto payments, or bills you’re struggling to pay. Other times, scams take the form of calls, apparently from a “government agency” or some other organization with a fancy, legitimate sounding name. Either way they say the same thing: you get money that you don’t have to pay back, just give us a little something first.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, says that all commonplace free grants are almost always scams, whether you come by them in the news paper, a magazine or even receive a phone call from someone who appears to know your information.
It’s easy to see why people would fall for them. We all fantasize about lining the lottery and what we would do with the cash. Scam artists prey on this desire, offering small lottery-like wins that will only, in turn, suck your money dry. FTC attorneys say that wherever you see these fake grants, they are rip offs.
How to Spot a Fake Grant Scam
There are two scenarios:
- you’ve been told you won a grant and you didn’t apply for one, or
- you’ve been told you’ve been won a grant and you did apply for one.
Obviously, the first scenario will make you more skeptical than the second one, but there are ways to tell in both cases if the grant offer you got is a scam.
Grant scammer almost always follow a speech: After congratulating you on your so-called winnings, they will ask for personal financial information, such as your bank account number so that they can either deposit your funds into your account or cover a fee of some sort. There’s truly no way to find out the identity of the person after the scam has happened, especially when they just took all your money, so don’t be tricked by this ruse as a legitimate organization will never ask you for this type of information.
If you actually did apply for the grant, you should be wary of the timing you got this notice to when you sent in your grant application. Grant reviews can take months, so if you’ve been notified you won within a few days, there’s something not right, and the notification you got is probably a scam.
It’s very unlikely that an authentic grant agency will ask for your bank account number, and will instead send you a check. This is reason enough to be weary of grants asking for financial information.
Follow what the FTC says
The Federal Trade Commision has a few simple and easy systems you can use to keep from being scammed by a fake government grant scheme:
- Don’t share your financial information with strangers, especially over the phone. A legitimate organization will never require this type of information, as it is far more customary for them to send a cheque than to deposit directly into your account.
- Never pay for a “free” government grant. Paying for a free grant means it’s not free, whatever the case may be. They may be tricky and say you have to pay for a minor expense, but don’t fall for it. Government agencies won’t ever make you pay a fee to receive a federal grant and you can easily find lists of the agencies that offer grants online. The only official access point for all federal grant-making agencies is grants.gov.
- What’s in a name? Well, just because a caller claims to be from the “Federal Grants Administration” or another, official sounding office doesn’t mean that they are. There is no such government agency. A quick google search will verify the validity of any organization that calls you, so take the time to look up who they are. You may be glad you did.
- Caller ID can be deceptive. With modern technology, scammers can easily change their location so that they say they’re from one place (say for instance Washington DC) but actually can be anywhere in the world. Be skeptical with callers.
- You can easily filter the unwanted calls you receive from telemarketers and scammers alike by placing your phone number on the National Do Not Call Registry. Register online here gov or register by phone by calling 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to reduce unwanted phone calls from.
- If you suspect you have fallen victim to a grant scheme, file a complaint with the FTC online, or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, Which is a database available to both U.S based and foreign law enforcement agencies. When you file a complaint, you put the scammers on the radar, which helps prevent them from using the same scheme to trick other people and makes it possible for them to be criminally charged.
Hearing that you won a government grant can be a dream come true, but exercise healthy skepticism before you let your guard down. Verify the agency that contacted you with a quick google search and listen to their message. If they ask for your monetary information like bank account or credit card number, run away as fast as you can. If they ask you to pay for a small fee or to pay the grant institution for reviewing your application, do not be fooled. Scammers are getting cleverer and it’s up to the regular citizen to guard themselves from scams. However, after reading this article you should be much more prepared to fend them off.