Fake U.S. Grant Scams on the Rise, Cautions Better Business Bureau

CHICAGO, IL – Individuals from around the country are reporting that they are receiving calls stating they are winners of a U.S. Grant. A number of these recipients have fallen victim to this fake grant scam including some from Chicago and northern Illinois. The Better Business Bureau advises that no one from the Federal Government will ever call with an offer of free grant money.

“Unfortunately, not enough people know the facts and instead believe they are the lucky winners of unearned cash,” says Steve J. Bernas, president and CEO of the Better Business Bureau serving Chicago and Northern Illinois. “The Federal Government does not give grants to individuals to spend on vacations or to pay outstanding debts, as these recent grant offers claim.”

The scam appears to have originated in India and Pakistan. Scammers purchase consumer information from companies that run payday loan affiliate websites. These companies usually have no idea they are dealing with scammers. Instead, they are lead to believe the scammers can offer some of their loan applicant’s financial assistance.

Armed with these lists and consumer information, the scammers make the calls. The scammers tell the victims they are a representative of the U.S. Government and they are calling to award them a federal grant, generally from $7,000 to $9,000. The reasons given for awarding the grant vary; it can be because they have no criminal background, have never filed bankruptcy or just do their taxes on time. They tell their victims this “free” money can be used for any “good” purpose but cannot be used for gambling, purchasing alcohol or partying.

To begin the process, the consumers are asked how they’d like to receive their money. They can have it deposited into their checking accounts, applied to a credit or debit card or receive it via wire transfer. However, in order to have access to their money, they must pay a “processing fee” or “general legal fee activation.”

If the consumer takes the bait and pays the fee, they are asked for more money to cover costs for insurance or other charges; some victims report losing several hundred dollars to these scammers.

In addition to losing their money, the victims also place themselves at greater risk for identity theft.

To avoid becoming a victim of this scam, the BBB recommends:

• Don’t give out your bank account information to anyone you don’t know. Scammers pressure people to divulge their bank account information so that they can steal the money in the account. Always keep your account information confidential. Don’t share it unless you are familiar with the company and know why the information is necessary.
• 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 that you have already been awarded or 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 official access point for all federal grant-making agencies is www.grants.gov.
• Look-alikes aren’t the real thing. Just because the caller says he’s from the “Federal Grants Administration” doesn’t mean that he is. There is no such government agency.
• Phone numbers can deceive. Some con artists use Internet technology to disguise their area code in caller ID systems. Although it may appear like they’re calling from Washington, DC, they could be calling from anywhere in the world.
• Take control of the calls you receive. If you want to reduce the number of telemarketing calls you receive, place your telephone number on the National Do Not Call Registry. To register online, visit donotcall.gov. To register by phone, call 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to register.

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