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Beware of Government Grant Scams

The American economy has really taken a hit over the past five years or so. High unemployment, a stagnant job market, and rising consumer prices have all combined to make this an extremely tough financial situation for millions of people. While the overall economic picture seems to be improving, no one can doubt that the recovery will be slow and painful.

With so many individuals looking for jobs and needing extra income, the climate is ripe for unscrupulous people to take advantage of the situation by offering "free" government money to unsuspecting consumers. It may be an advertisement promising a no-cost grant to pay for everything from home repairs to education costs. Or perhaps a phone call from someone who sounds very "official" claiming that all you have to do to receive the funding is apply- approval is guaranteed. And you never have to repay the money.

Sound too good to be true? According to the Federal Trade Commission, it probably is. Whether you see these claims in a legitimate newspaper or hear about them over the phone, the chances are fairly certain that they are all scams.

Be Alert

There are some basic, common-sense rules that consumers can follow to avoid becoming a victim of one of these "government grant" scams:

  • Never pay any money for a "free" grant. If you are required to pay for a free grant, it isn't free. A legitimate government agency does not ask for any type of payment. The names of foundations and agencies that award government grants are available at no cost at any public library or on the Internet.
  • Never give out your bank account information to anyone you don't know. Con artists and scammers are very persistent when trying to get people's financial information. Once you give them access, they can easily steal your money.
  • Don't automatically assume a telephone number is legitimate. Many scammers use sophisticated Internet technology to disguise the telephone numbers from which they are calling. While your caller ID may show the area code for Washington, D.C., the person can actually be calling you from anywhere in the world.
  • Always check out the validity of any government agency's name. A caller may say he's from the "Federal Grants Administration" but in reality there is no such government agency. It's easy to check the authenticity of an agency by going to the blue pages of your telephone book. All legitimate government agencies are listed there.
  • File a complaint. If you feel you have been the victim of a government grant scam operation, you may contact the FTC either online or at 1-877-382-4357 to file an official complaint.

The Facts

In reality, there are government programs available for individuals needing assistance. By knowing the following facts about these programs you can avoid being taken in by a professional scammer or con artist.

  1. The government does provide help to individuals and families through various benefit programs. These include assistance for job training, education, health care, and nutrition.
  2. You must apply for any government assistance programs. Each program has its own specific eligibility requirements.
  3. You do not have to pay a fee to apply for a government assistance program or grant.
  4. Government assistance programs do not always provide cash payments. Those that do may have specific limitations and restrictions.
It's important to remain skeptical if you are ever contacted by someone you think may be a scammer. They may want your bank account information or perhaps a "small" fee to apply for your so-called government grant. Or they may want your help and time to increase their site traffic by offering you some type of reward at the end (which you never receive). Always protect your personal and financial information. Don't be fooled! Take the time to research the agency or company by checking with official sources.