If you could use an extra $9,000 tax free, with no strings attached, you are not alone. For many, a phone call from a stranger promising such a lucky cache is enough to make even natural skeptics relax their defenses. For one Twentynine Palms businesswoman, the allure of free money wasn’t enough to make her suspend common sense and become an easy target. Reporter Mike Lipsitz fills in the details…
According to the Federal Trade Commission or FTC, the government grant scam has been used for years to cheat the public. For Mary Jane Binge, the recent call followed a traditional script. The clear-headed Twentynine Palms businesswoman answered a call from a man with heavy accent claiming to be from, “a government agency.” He told Binge she was approved for a no-strings, $9,000 government grant. The caller knew Binge’s name, age, and address, and gave her a reference code along with a number to call. Playing along, Binge placed the call to a woman who identified herself as a manager and instructed Binge to go to Western Union, presumably to pay a fee. Binge dropped the matter at that point but throughout the day the perpetrators phoned repeatedly from at least 10 different numbers. Such harassment is also illegal. Complaints should be filed with the FTC by calling 877-FTC-HELP (877-382-4357).
If you receive such a call, never provide personal information and know that legitimate government grants don’t require a fee and don’t arrive by surprise, you must apply for them.
Here are five ways to spot a grant scam:
- Grants do not show up as a surprise—you must apply for them. If you’re offered a grant you know nothing about, it’s a scam.
- If you must pay a fee to apply, collect, or learn about a grant it’s a scam. Demanding an application fee is the primary way scammers profit.
- Federal grants to businesses or nonprofits are for the benefit of the company. If it’s for school, living or other personal expenses, it’s a scam.
- What agency does the issuer represent? Although it may sound impressive, if they say they’re from the Federal Grants Administration, there is no such office, it’s a scam.
- If asked for ID or banking information ask the caller for the proposal in writing. Chances are you’ll never hear from them again.
Never give banking information by email or phone. No legitimate entity requires payment via a gift card, in cash, or through a money wiring service.
Over the past few months, the Council on Financial Assistance Reform (COFAR) and the Chief Financial Officer Council (CFOC) has received inquiries and complaints from persons targeted by a fraudulent grants scheme. According to reports, victims are told they have been selected to receive a government grant ranging from $5,000 to $25,000. In order to receive the grant money, the representative explains a “processing fee” ranging between $150 and $700 must be paid and asks individuals for bank account information.
will never request banking information, social security numbers or other personally identifiable information to facilitate the issuance of a “grant”. Grants are not benefits or entitlements. A Federal grant is an award of financial assistance from a Federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States.
Please note:
• No government grant-making agency will call; send email or letters to solicit money or personal banking information from a potential grant recipient.
• There are no processing fees for federal grants.
• Federal grants are not issued for personal use but are intended for institutions and non-profits to carry out projects with a public purpose.
• Know who you’re dealing with online. Scammers often create websites with names similar to legitimate sites.
• If you provided personal banking information to anyone claiming to be from a Federal grant agency, call your bank immediately to prevent unauthorized access to your account.
According to the Federal Trade Commission, following a few basic rules can keep you from losing money to “government grant” scams:
• Don’t give out your bank account information to anyone you don’t know. Scammers pressure people to divulge bank account information so they can steal from the account. Always keep your bank 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 government grant. If you must pay to claim a “free” government grant, it isn’t free. A real government agency won’t ask you to pay a processing fee for a grant you have already been awarded — or to 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 only 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 they are from the “Federal Grants Administration” doesn’t mean it’s true. There is no such government agency. Take a moment to check the blue pages in your telephone directory.
• Phone numbers can deceive. Some con artists use Internet technology to disguise their area code in caller ID systems. They may look like they’re calling from Washington, DC, but 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.
• File a complaint with the FTC if you think you may have been a victim of a government grant scam, Call 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
