North Carolina Department of Justice

North Carolina Department of Justice

North Carolina Department of Justice
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Grant scams promise cold cash but fail to deliver

8/7/2009

 
By Attorney General Roy Cooper
 
One of the hottest rip offs right now involves tricking people into paying for help winning government grants that don’t really exist.
 
Grant scams use people’s hopes for money in hard times to bilk them out of hundreds or even thousands of dollars. People who get caught up in these schemes never see one dime of grant money. Most victims lose between $1,000 and $3,000 to these scams, and one victim of a grant scam that was operating in North Carolina lost $24,000.
 
Here’s how the scammers usually operate: the company tells you that a ton of money is available through government grants for people just like you, and they can help you learn how to get it. All you have to do to get the money is pay the company a fee. Or they tell you that you’ve already won a grant, and then ask you to hand over money or your bank account information before you can get the grant. In other cases, they may invite you to a seminar where they claim you’ll learn how to win grants.
 
My office has taken four grants scammers to court over the past three years, shutting them down and winning money back for consumers whenever possible. In July, we won a federal court order to stop a scheme involving six companies in Kansas and North Carolina. These companies used promises of government grants connected to the federal economic stimulus package to rip off struggling consumers.
 
Unfortunately, more grant scams are popping up, using the bad economy to try to get rich at your expense.   Here’s how you can avoid these scams:
 
  • Beware of anyone who promises you free or easy money in exchange for an upfront fee.
  • Don’t be fooled by telephone calls or official-looking letters that tell you you’ve unexpectedly won a government grant you didn’t apply for, and don’t give out personal information such as Social Security or bank account numbers to get a grant.
  • Steer clear of grant offers that claim you can use the money for anything you want. Most legitimate government grants given to individuals are for specific purposes, such as to pay for emergency repairs after a hurricane, fund research projects, start certain types of small businesses or cover college costs.
  • Don’t fall for outfits that say they can guarantee you a grant. Legitimate grant programs are competitive, and not everyone who applies gets funding.
  • Never pay money for brochures or other materials that are supposed to help you win a grant. 
  • Information about legitimate government grant and loan opportunities is available for free from federal, state and local government offices and online at www.grants.gov and www.govbenefits.gov . Students can also explore financial aid resources such as student loans at www.cfnc.org.
  • Always check out a company with my Consumer Protection Division before you decide to do business with them. Call us at 1-877-5-NO-SCAM or visit www.ncdoj.gov to check up on a business, report a scam or file a complaint.