Nature

How to avoid government grant scams

by: Better Business Bureau

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Updated:

Free money from the government that you will never have to pay back? If it sounds too good to be true, that’s because it’s the hook for a common con.

This scam promises you free money in the form of a government grant. All you have to do is pay a fee.

How the scam works:

Scammers contact you through phone calls, emails or social media posts. Whatever the medium, the message is the same: the government grants “free subsidies”. You are told that your application is guaranteed to be accepted and that you will never have to return the money. You can use the “grant” to pay bills, make repairs or pay for education costs.

When you respond to the ad or take the bait on the phone, the scammer pretends to be a “government agent.” The scammer praises you for qualifying for the grant and asks for a one-time “processing fee”. Other fees will inevitably follow, and they may all seem very official. Whatever the story, one thing is certain; you will never see the money.

Tips for spotting this scam:

  • Free money is not easy. Scammers would have you believe that government grants are there to be taken. In reality, obtaining a government grant is a complex process, in which the grant seeker seeks the funds, not the other way around. If someone is actively soliciting you for money, that’s a red flag that you’re dealing with an impostor.
  • Don’t pay money for a “free” government grant. If you have to pay money to claim a “free” government grant, it’s not really free. A real government agency will not ask you to pay advanced processing fees. The only official listing of all US federal granting agencies is www.grants.gov. For more information on Canadian grants, contact the Financial Consumer Agency of Canada.
  • Check lookalikes. A caller may say they are 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 your details on your own and call them to make sure the person you heard about is legit.
  • Be careful with unsolicited calls asking for your banking information. The scammers will cold call, ask basic questions to see if you qualify for a grant, then ask for your banking information saying they need to charge a one-time processing fee and deposit your money directly.

Source: BBB.org

To report a scam, go to BBB Scam Tracker. To find reputable companies, go to https://www.bbb.org.


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