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FRAUD RESOURCE CENTER

Government Grant Scams

It might start with a phone call from someone claiming to be an official from the Federal Grants Administration (which doesn’t exist) and bearing the news that you’re eligible for a lucrative grant that the government is providing to help people just like you. Or you get a Facebook message or see a post from someone who says he was just awarded thousands of dollars in federal funding and who provides a phone number you can call to apply and get your share. 

If it sounds too good to be true, that’s because it is. 

Social media has given scammers a new tool to trick people out of their money by dangling the prospect of government largesse, but the basic scam hasn’t changed. Once the crooks have an unwitting person on the hook, they’ll ask the target to send a money order, make a wire transfer or provide credit card or bank account information to cover processing fees for the grant. They may also say they need your Social Security number to verify your identification.

Once they collect that first payment, the thieves may ask for additional fees — but the promised grant never materializes. Worse yet, they now have the personal and financial information they need for identity theft. (The same goes for a cousin of the grant scam, in which the crooks claim the government is holding valuable unclaimed property of yours that you can obtain if you pay a fee or provide personal info.) Here are some tips on how to avoid being taken.

Warning Signs

  • Someone claiming to be a government official contacts you out of the blue to tell you that you’re eligible for a grant. The federal Grants.gov website states that the government only contacts people about grants if they’ve filed an application.
  • A caller wants you to pay a fee in order to receive a grant. There is never any charge to apply for a federal grant. 
  • A caller tells you that you’re eligible for a personal grant that you can spend any way you choose. According to Grants.gov, federal grants usually go to universities and other institutions for specific programs, projects or research.

Do's

  • Do be wary of magazine or newspaper classified ads that tout “free grants” and provide a toll-free number to call. The Federal Trade Commission (FTC) warns that some scam artists use such ads to entice potential victims.
  • Do unfriend and block any social media user who sends you an unsolicited message about a government grant, and report it to the social media platform. Even if the message appears to come from someone you know, the Better Business Bureau notes, that person’s account may have been hacked or their profile cloned.
  • If you live in an area that’s been hit by a natural disaster, do watch out for scammers who claim to represent the Federal Emergency Management Agency (FEMA) or the Small Business Administration (SBA). FEMA says actual government workers wear ID badges and will never ask a disaster victim to pay a fee for federal aid. 

Don'ts

  • Don’t assume a Washington, D.C., number on your caller ID means a grant offer is on the level. As Grants.gov warns, scammers use technological trickery to hide their actual location, which could be anywhere in the world.
  • Don’t give your Social Security number or banking information over the phone to anyone you don’t know. 
  • Don’t believe a caller who claims you can apply for the grant over the phone. Legitimate government grant programs require you to fill out and submit an application. 
  • Don’t pay a fee to a company that says it will help you find grants. You can check directly with government agencies about grant opportunities, for free. 
  • Don’t respond to letters or emails about unclaimed property that request fees or personal information. If you receive information about unclaimed property in your name, check it with your state property agency. You can also search the free "Missing Money" database maintained by the National Association of Unclaimed Property Administrators.

AARP Fraud Watch Network

Fight back against frauds and scams! Call our free Fraud Watch helpline at 877-908-3360 to speak with volunteers trained in fraud counseling. You can also sign up for Watchdog Alerts and check out our scam-tracking map.

More Resources

  • If you think you’ve been the victim of a government grant scam, notify the Federal Trade Commission. You can file a complaint online or by phone at 877-382-4357. 
  • If scammers contact you online about a grant offer, file a report with the FBI’s Internet Crime Complaint Center.
  • You also can report grant-related scam attempts to the U.S. Department of Health and Human Services Fraud Hotline at 800-447-8477.

Published: Dec. 3, 2018

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