The ink was still wet on last month’s newly signed economic stimulus package when the latest round of stimu-lies began: websites, e-mails and online advertisements promising an inside track to get your piece of that $787 billion pie—via government grants.
Some touted smiling people holding five-figure U.S. Treasury checks, with compelling testimonials of financial struggles … that ended after “I got my stimulus check in the mail in less than seven days.” Others had prominent photos of President Obama to suggest their legitimacy.
Less obvious is their real purpose: to steal your money or grab personal information to conduct identity theft.
“It’s taken scam artists no time at all to exploit the headlines about the president’s plan and to use those headlines to stimulate their own fraudulent businesses,” says Eileen Harrington, acting director of the Federal Trade Commission’s Bureau of Consumer Protection.
One ploy she detailed at a March 4 press conference: Scammers entice targets to reveal their credit card numbers with a promise of revealing a list of available grants for a small fee—sometimes under $2. That puts their plastic into the wrong hands, and locks unsuspecting consumers into hard-to-cancel payments that could cost more than $1,000 a year. “You can count on seeing all sorts of unexpected charges show up on your credit card statement,” Harrington says.
Another ruse is to ask for bank account and other personal information for a “direct deposit” of your piece of the money—and to use that data to conduct identity theft. Or scammers send e-mails with “get more information” links that download dangerous computer malware to steal passwords and online account information.
Some of these phony websites and advertisements have vanished into cyberspace since Harrington’s press conference, which came one day after the Better Business Bureau (BBB) issued a national alert on stimulus-related grant scams. In just weeks, the BBB received more than 1,000 complaints about a handful of companies that ripped off consumers or sold a “free” how-to CD that resulted in multiple credit card charges.
But other grant-getting scams continue—and you can expect more to pop up.
Here’s what you should know:
• Uncle Sam doesn’t charge. There is one authentic government grant website: www.grants.gov. Any other website is a fraud—especially if its address ends in .com (as opposed to the harder-to-obtain .gov addresses). “The government does not charge people to apply for a grant,” Harrington adds.
• Know who is eligible. Most grants are given for student aid, for research or for businesses in particular industries. Instructions on how to apply, software and CDs are available for free on www.grants.gov, as well as on www.studentaid.ed.gov, www.govbenefits.gov and www.sba.gov.
• Beware phony foreclosure calls and e-mails: Hang up on callers and delete e-mails purporting to offer help to prevent foreclosure by obtaining stimulus money on your behalf. You must contact your lender for those programs; no one will solicit you for them. The same applies to e-mails alleging to be from the Internal Revenue Service or other government agency. Instead, call the agency yourself to verify the information.
• “Government” checks may be bogus: Toss any unexpected “government” check that arrives to you—other than the upcoming “senior stimulus” payment. The real stimulus checks—$250 for individuals and $500 for couples—will begin mailing in May to retirees and other Social Security beneficiaries, and no action is required to get them. Any other “secondary stimulus” checks you get are bogus.
Sid Kirchheimer is the author of Scam-Proof Your Life (AARP Books/Sterling).