What could you do with an extra $9,000? What if you didn’t have to do a thing to get the money? That’s the hook for a common con nicknamed the “Government Grant Scam.”
This scam has victims believing they have been awarded a free government grant, and all they have to do to claim the money is pay a fee. Better Business Bureau was sent the story of one Idaho woman who thought she was awarded a $9,900 grant for “paying her taxes on time.” The woman was given the name and ID number of the “agent” she was working with, and that agent instructed her to pay a small fee to claim her money. The woman then went to a large retailer to purchase the prepaid gift cards required, and that’s when an associate of the store got involved. Fortunately, realizing it was a scam, the woman didn’t lose any money.
Another person was not so lucky, and she reported her story to BBB’s Scam Tracker. She said she was contacted by someone saying she had been awarded thousands of dollars in a grant, and she received a Confirmation ID. She was instructed to stay on the phone while she went to purchase a $200 gift card to cover her registration fee. Then, she was told money would be wired to an account as long as she provided her checking account information. Sadly, the victim says she bought four, $50 gift cards and read the codes to the scammers. The con artists then told her she needed to pay another $500 to cover taxes, and that’s when the victim stopped talking to them.
The Better Business Bureau says this scam can be carried out in a number of ways, with the bad guys contacting you by phone, email or social media. No matter the medium, the message is similar: The government is awarding “free grants” and you are eligible and guaranteed money. There is just a small, one-time “processing fee,” but almost assuredly, more requests for cash come but no grant money.
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Keep in mind these tips from BBB to protect your money and personal information:
• Free money doesn’t come easy. In reality, obtaining a government grant is an involved process and one where the grant seeker pursues the funds, not the other way around. If someone is actively soliciting you to give you money, that’s a red flag that you are dealing with an imposter.
• Do not pay any money for a “free” government grant. A real government agency will not ask you to pay an advanced processing fee. The only official list of all U.S. federal grant-making agencies is http://www.grants.gov.
• Check for look-alikes. A caller may say he is from the “Federal Grants Administration” — which does not exist. Be sure to do your research and see if an agency or organization actually exists. Find contact info on your own and call them to be sure the person you’ve heard from is legitimate.
• 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.