Be aware there is no FREE money
The old truism about when something sounds too good to be true, it has probably never been truer or more relevant. In 2016, the Better Business Bureau (BBB) received more than 1100 reports of government grant scams through the BBB Scam Tracker. This online tool gives consumers an outlet to report scams and fraud and a means of spreading the word about these nefarious schemes. The BBB recommends that consumers keep their eyes open for swindlers posing as government representatives offering “free money” for a fee. Central East Texas BBB President and CEO Mechele Agbayani Mills pointed out the warning signs of a scam artist.
“Government agencies do not make phone calls to individuals to solicit funds or financial information,” she said. “There is an application process for all government grants. If you have not submitted an application for a grant you will not be awarded one.”
Scammers use phone calls, e-mails and posts on social media to contact their potential victims. The message is nearly always the same–the government is awarding “free grants.” The message indicates to the victims that their application is guaranteed and they will never have to repay it. These swindlers paint a rosy picture of how recipients will be able to pay bills, make repairs and upkeep and pay education costs.
After somebody takes the bait, the scammer claims to be a “government agent.” After congratulating his victim for being eligible for a grant, the con artist says he will need a “processing fee.” Other fees follow this initial one, and they are all expertly created to appear legit. The overriding theme of this process is that no matter how much someone pays the scammer, no “grant money” will ever reach the victim.
BBB offers the following tips to help you avoid these “government grant” scams:
Be careful with unsolicited calls asking for your banking information. Scammers will cold call, asking basic questions to see if you qualify for a grant, and then ask for your banking information saying they need to collect a one-time processing fee and directly deposit your money.
Don’t pay any money for a “free” government grant. If you have to pay money to claim a “free” government grant, it isn’t really free. A real government agency won’t ask you to pay a processing fee for a grant you have already been awarded – or to pay for a list of grant-making institutions. The names of agencies and foundations that award grants are available for free at any public library or on the internet. The only official access point for all federal grant-making agencies is grants.gov.
Look-alikes aren’t the real thing. BBB has received numerous calls from consumers claiming the “Federal Grants Administration” approved them for a grant. Just because the scammer claims to be with the “Federal Grants Administration” doesn’t mean they are. There is no such government agency. Take a moment to check out the agency to determine its legitimacy.
Phone numbers can deceive. Some con artists use internet technology to disguise their area code in Caller ID systems. Although it may look like they’re calling from Washington DC, they could be calling from anywhere in the world.