A government grant scam is a form of government impostor scam. The criminals impersonate official government entities. These government grant schemes can be costly for victims and further consumer distrust in the federal government.

According to the Federal Trade Commission (FTC), more than 1,600 people reported this type of scam in the first half of 2019.

To combat this type of lucrative scheme, people need to be aware of what it is, how to spot the red flags, and what to do if they are targeted. Read on to learn all about government grant scams and what you can do if the scam artists come after you.

What Are They?

Government grant scams involve the promise of a “free” grant to pay for home business expenses, home repairs, education costs, unpaid bills, or something else.

Scam artists will offer the grant and then request the target’s bank account information under the guise of directly depositing the grant money or taking a one-time processing fee.

Scammers operating a government grant scam will often run ads in the classified section of local newspapers, through online avenues or wherever else they feel they will reach their targets.

Bolder perpetrators of these schemes will contact consumers directly through email or a phone call. However they present the scam, the goal is the same, to separate somebody from their money.

Red Flags

The largest red flag for these scams is the unrealistic premise of the offer itself.

Government grants are rarely awarded to private citizens and are NOT given to pay down personal debt, fund education, or for home improvements. Generally, these grants are awarded to:

  • Universities
  • Institutions
  • Organizations
  • Local governments

They are usually given for use on specific projects, research, or programs.

Furthermore, grants are only awarded after an application has been submitted through a legitimate government website like Grants.gov. Federal grants cannot be applied for through email or over the phone. Nor can they be obtained without an application being filed. Thus, anyone contacting you to offer an unsolicited government grant is trying to scam you.

Another huge red flag for these types of scams is when the con artist claims the target needs to pay a one-time processing fee, or any other charge, to receive their grant funds. The U.S. government never charges entities or individuals a fee to apply for or receive a federal grant.

Protect Yourself

The best way to protect yourself from being the victim of any type of scam is to never give your personal or financial information to anyone that you don’t know for certain is somebody whom you can trust.

These scam artists are getting tricky. Often tech savvy, they know a hundred ways to make themselves look authentic. That makes consumer vigilance essential to preventing the damage caused by a government grant scam.

To protect yourself from these thieves, question everything.

  • Pay attention to caller ID – Just because your caller ID says that the person is calling from Washington D.C. does not mean that they are. The truth is, with the current technology that call can be coming from anywhere in the world. It is even easier to fake an email address. Be alert and be aware that just because it looks legitimate, does not mean that it is.
  • Beware of official-sounding callers – Many government grant scammers will claim to be from the National Grant Administration or Federal Grant Department or some such entity. While this sounds very official and legitimate, it is not. Even if either of those organizations existed – they don’t – they would not be the proper agency to administer a federal grant.
  • Add yourself to the National Don’t Call Registry – To reduce the number of unwanted calls you get, you should add yourself to the National Don’t Call Registry. You can register your number online or by calling 1-888-382-1222 from the phone number you’re registering. The website also provides avenues to verify your registration on the list or report unwanted calls, also known as spam calls. While this won’t stop die-hard criminals from calling, it may dissuade some of the more wary scammers out there. If nothing else, it lets scam artists know that you’re being vigilant, and you will not be an easy target.
  • If you receive a call that you’re unsure about don’t be pushed into anything. Tell them you cannot make any commitment at that moment and ask to call them back after you have spoken to your attorney. Even if you don’t have an attorney to call, scammers may just hang up. If not, ask the caller for their name, the company they represent, their call back number, and the exact reason for their call. Then put on your detective cap and take to the internet to do some research. Find the official website and phone number for the company they claim to represent. If it exists, call the official number and ask for the person who called you.

Don’t take anything at face value.

If you believe you have already been the target of a government grant scam, protecting yourself becomes reporting the scam and reaching out for resources.

Reporting Government Grant Scams

If you think you’re being targeted by con artists running a government grant scam or have been the victim of this type of fraud, there are resources available to help. There are several agencies through which a complaint can be filed.

These agencies include:

  • The FTC – The Federal Trade Commission (FTC) offers easy reporting of a complaint via its online wizard that walks consumers through reporting a scam. Complaints can also be filed via the FTC’s toll-free call-in line at 877-FTC-HELP (877-382-4357).
  • The U.S. Department of Health and Human Services – The U.S. Department of Health and Human Services (DHHS) also provides a fraud hotline for the reporting of grant-related scams at (800)447-8477. Finally, the FBI operates an internet Crime Complaint Center for grant offers sent online.
  • Fraud.org – Fraud.org is a nonprofit organization based in Washington D.C. that was developed as a project of the National Consumers League (NCL). Their website provides tips and resources for avoiding government grant scams and others.
  • The Better Business Bureau – The Better Business Bureau (BBB) operates a Scam Stopper website. It collects and disseminates information on the latest scams throughout the United States to help consumers avoid those schemes.

The key to preventing any scam is knowledge. Knowing what to look for and how to respond can be the difference between being safe and being scammed. There is no shame in being scammed by these shrewd con artists. With the tips above, we can stop these thieves in their tracks.

in Phone ScamsWeb & Email Scams
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