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Cedar Rapids, Iowa 52401
Beware fake government grants
Scammers will ask for your banking information, take your money
By Bobby Hansen, - From the Bureau columnist
Jun. 9, 2023 5:00 am
Free government money that never has to be repaid? If this sounds too good to be true, that’s because it’s the hook for an all too common con.
This scam promises free money in the form of a government grant to use in any way you desire. The only hitch is sharing all of your personally identifying information and paying a nominal fee in advance. This is not a new scam, but some of the tactics being used are.
How the scam works
Scammers make contact through mailings, phone calls, emails or, more recently, posts on social media. No matter the medium, the message is similar: The government is awarding "free grants."
After being told that an application is guaranteed to be accepted, the final incentive is noting the grant recipient never will have to repay the money. The scammer says the grant may be used on anything and that it could be used to pay bills or make repairs or for education costs.
Once the victim replies to the ad or takes the bait, scammers explain the process and identify themselves as a “government agent,” frequently referring to their association with a familiar sounding federal agency.
The con artist offers congratulations on being eligible for the grant and then asks for a one-time “delivery fee” or “processing fee.” Once paid, other fees inevitably follow, all seeming official. Whatever the story, one thing is certain: You will never see the money.
Tips to spot this scam
- Free money doesn’t come easy. Scammers want the public to believe government grants are there for the taking. In reality, obtaining a government grant is an involved process where the grant seeker pursues the funds, not the other way around. If someone is soliciting a grant award, it’s a red flag.
- Do not pay any money for a "free" government grant. If you have to pay to claim a "free" government grant, it is not free. Never pay anything in crypto, gift cards or wire transfer. A real government agency will not ask for an advanced fee. The only official list of all U.S. grant-making agencies is www.grants.gov.
- Check for look-alikes. Callers may say they are with the “Federal Grants Administration” — which does not exist. Be sure to research and see if an agency or organization actually exists. Find contact information and call for verification.
- Be careful with unsolicited calls asking for banking information. Scammers will cold call, asking basic questions to qualify for a grant, and then ask for banking information to collect the “one-time” processing fee and to directly deposit the purported grant proceeds.
Bobby Hansen is regional director for the Better Business Bureau Cedar Rapids office. Comments: (319) 365-1190; info@dm.bbb.org.
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