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Government Grant Scams
You don't need to join the Federal Grant Association to receive a Federal grant. Fall for this telemarketing scam and you could be out as much as $5000
This is a phone scam that has been on the rise lately. Out of the blue, you will receive a call
from a person claiming to represent a government "grant association" or a federal "grant association". The caller will offer to
help you get a government grant of somewhere in the neighborhood of $5000.00. The scam is, of
course, that they will request that you pay a fee for the service. This fee will range in price
of $149 to $299, but could be any amount. The will also ask for your bank account number and
mother's maiden name, and any other information that they can use to bilk you out of your money.
Getting personal information out of you over the phone is typical of almost any telemarketing scam
so think twice before you give any out.
Don't give out your personal information to just anyone over the hone
Never give your bank account number to someone that calls you out of the blue. Once someone has your
account information they can withdraw all of your funds. Giving someone your social security and bank
account numbers could also lead to identity theft.
The Federal Grant scammers may even be specific about what government agency they represent. FEMA, the Federal
Emergency Management Agency, is a well-known agency. They are the agency that responds in times of
national emergencies, such as hurricanes. People who have actually applied for a government grant
from an agency such as FEMA may confuse the bogus offer with a real government grant they are seeking.
There are no "charges" for real government grants
The government will never charge you a fee to process a grant, or any other application. Your tax
dollars pay for government agencies to exist. An agency would also never require you to provide vital
financial information over the phone. Someone claiming they are going to give you money but first they
need to charge you a one-time processing fee should raise a lot of red flags. Think before you act.
Some grant scams involve criminals placing ads in newspapers and on websites offering loans for small
business. If you respond to one of these bogus government loan offers you will quickly be approved. What
comes next should raise more than a few eyebrows. In order to collect your loan you are required to wire
funds via Western Union to pay for insurance on the loan. Thousands of dollars may be asked for but the
loan could be for much more making it seem reasonable. The trick here is that it's never reasonable for
someone to ask for money to insure a loan. If you wire money to someone for loan insurance you can kiss
it all goodbye. You won't see a dollar of your loan or your loan insurance money again.
Common Goverment Grant Scam Techniques
Many are tricked, in part, because these government loan scams use real sounding names to fool people. Some
of the scams use actual names of well known financial instutions and government agencies. If you go to their
website it will probably look very respectable and sophisticated. Designing a legitimate looking website is
part of the scheme. If you're sent to a website for more information or to fill out forms it makes many
people feel more comfortable with the whole deal. The part that fools people is that the website domains
will be just a little bit different than those of the real financial or government websites. Just different
enough to trick you. Real government websites usually, but not always, have domains ending in .gov which
is difficult to forge. Bear in mind that you can make a link say anything you want. Where that link takes
you is another story. When the link says government-loans.gov but once clicked you are taken to
government-loans.com you should be on your guard.
Tips for avoiding government grant scams
- No legitimate grant will require a fee upfront - in fact, charging is illegal.
- A legitimate grant will not arrive by surprise. In order to receive a grant you must apply for it and wait for approval.
- Never give your personal information to someone who calls you, even if they sound legitimate. Request the caller's number, the name of their organization, and the location of their headquarters. Check your local phonebook, the internet, and with the Better Business Bureau to make sure the organization is legitimate. If they refuse to provide information, hang up.
- Always ask for all information in writing and request the caller to mail/fax/e-mail the information to your attention
- If you are interested in finding a grant, visit www.grants.gov or ask your local librarian for their listing of federal grants.
- You may also search for available grants by contacting the Catalog of Federal Domestic Assistance (CFDA).
Remember: Never give out personal information over the phone when you did not initiate the call.
To report a telemarketing scam, contact your local Attorney General's office and/or file a complaint
with the Federal Trade Commission at: www.ftc.gov/ftc/consumer.htm.
You can also report fraud to the National Fraud Information Center at 800-876-7060.
Related Federal Grant Scam Links:
"Free" Government Grant Scams
The Myth of Free Government Money: A Perennial and Pernicious Scam
BBB Warns Local Consumers: Don't Fall for Government Grant Ploy
Tax-Related Telemarketing Government Grant Scams
Government grants scams: Top Telemarketing con of 2004 is still dialing in 2005
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