Scam Alert: Uncle Sham Wants You
By: Sid Kirchheimer; Source: AARP Bulletin Today Date Posted: December 2006
Yvette Jones had no reason to suspect anything amiss last February when a woman phoned and said she was calling on behalf of the federal government.
An office worker and single mother, Jones, 50, needed a new roof on her Irvington, N.J., house and had been trying to get a federal housing grant by going to websites that claim they accept applications for such grants. She says even though she has an unlisted phone number, the caller, who identified herself as Lisa James, an agent with the U.S. Department of Housing and Urban Development, was able to reach her, explaining that the "government has access to such information."
James made it clear the grant was for a new roof only and couldn't be used to gamble or buy illegal drugs—words of caution, Jones says, that were "just as I'd expect from a federal employee."
Nor was she surprised when James requested $349 to process the $5,500 grant, because most of the "grant" websites she'd seen charged processing fees. She readily provided her bank account number for an automatic withdrawal.
A company—in the British Virgin Islands—withdrew the money from Jones' bank. But she never got the promised grant check. "Each time I called," she says, "I got a different person. Each time, they said the check was sent via bulk mail, and I should be patient."
Then the toll-free phone line for "Lisa James"—in fact, a company known only as CGMS Inc.—was disconnected. Jones' bank held her responsible for the $349 withdrawal, and her roof still hasn't been replaced. "Live and learn," Jones says. "And boy, did I learn."
Unfortunately, she was riding the crest of a wave of phony grant scams: They are now among the top three scams carried out via telemarketing calls and e-mails, says Susan Grant of the National Consumers League in Washington.
Jones was victimized by going to what turned out to be bogus websites that were actually collecting contact information for their "sucker lists." Another way these scams occur is when swindlers, using phone numbers and e-mail addresses from commercial directories, offer government grants—or help getting them—to the unsuspecting. The goal isn't just to collect fees. It's to steal identities by luring victims into giving out their Social Security and bank account numbers and other personal information.
"It's amazing how many people think the government is contacting them about giving away money—to make a home repair, start a business or help pay their taxes," Susan Grant says. "I can assure you, the government doesn't do that."
In reality, federal grants aren't available to individuals but are awarded to businesses and institutions—or to nonprofit groups and other agencies that distribute grant money. Nor does the government offer grants unsolicited.
John Etcheverry, acting program manager of Grants.gov, the federal clearinghouse for issuing grants, says, "I cannot think of a single situation in which any [government] agency would ever get on the phone or send an e-mail to a citizen to drum up business for grants."
(If you're looking for government assistance for yourself or your family, go to benefitscheckup.org to find out which programs you qualify for. The benefits are generally administered by local and state agencies.)
For protection from grant scams:
* Don't believe anyone who claims to be from the government and offers you a grant or assistance getting one.
* If you're seeking a federal grant for your organization, e-mail support@grants.gov or call 1-800-518-4726 to check its authenticity.
* Never pay anything in exchange for a grant.
If you believe you've been a victim of a government grant scam, contact your state attorney general or go to the Federal Trade Commission website at www.ftc.gov.
Sid Kirchheimer is the author of AARP/Sterling's Scam-Proof Your Life.
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