Free grants are financial assistance programs that are either provided by the government or private foundations to individuals or families who qualify for assistance. Often free grants may be advertisements or offers that promise government assistance or a set amount of money upon a successful application.
When it comes to free grant scams, the advertisements or offers for financial assistance typically guarantee that a party’s application will be automatically accepted. Free grant scams may also claim that the money does not have to be repaid or everyone qualifies for the program.
As far as free grant programs, grant programs typically connect people with resources to cover various expenses, such as grants offered for:
- Home Purchase: There are many programs that offer down payment assistance to help individuals and families purchase a home;
- Education: One of the most well known grants are educational grants that allow an individual to receive a certain sum of money to be utilized towards educational expenses;
- Food: The Supplemental Nutrition Assistance Program (“SNAP”) is a federal program that provides food and nutrition benefits for qualifying families that meet a certain income restriction;
- Unpaid Bills: There are many grant programs, such as the Low Income Home Energy Assistance Program (“LIHEAP”) that provides low income households with assistance with utility bills; and/or
- Internet and Phone Services: The Lifeline program is a federal program that provides qualifying individuals with discounts on phone or internet services.
As can be seen, there are numerous government sponsored and private grant programs that offer financial assistance to individuals and families. However, the Federal Trade Commission (“FTC”) has issued warnings regarding an increase in the amount of free grant scams targeting susceptible persons. In general, if there is a targeted advertisement offering a free grant, with a guaranteed acceptance, then that may be a free grant scam.
What Does a Typical Scam Look Like?
A free grant scam is a criminal fraud scam that targets and presents individuals with an opportunity to get information regarding an available federal or private grant opportunity in exchange for a fee.
Importantly, criminal fraud involves a scheme that is intended to cheat or deceive another person or entity, in order to obtain a financial or similar type of gain. Criminal fraud acts are considered to be a white collar crime. As such, free grant scams are also considered to be white collar crimes.
In a free grant scam, susceptible individuals will often be targeted by a classified ad or targeted electronic ad that includes a toll free number to apply for free grant money. Then, when the individual calls the number, they will be asked a series of questions regarding their eligibility in an attempt to have the individual believe that the program is legitimate.
After going through a series of questions, the targeted individual will then attempt to ask the individual to pay a processing fee in order to process their application in order to receive the grant money. In many cases, the processing fee will be explained as a fee for processing the application and opening the account in which the funds will be delivered to the applicant.
It is important to note that none of the actual grant programs listed above will ever ask for a processing fee or any other fee in relation to determining an individual’s eligibility for financial assistance. Further, individuals should always verify the authenticity of a program before ever providing their personal identifying information, as such information can be utilized to steal funds. In fact, these scams also commonly lead to identity theft.
What Should I Look Out For?
Once again, there are certain things that a person should look out for when determining whether a grant program is a scam or not. In general, legitimate government grants will contain the following:
- Grant money is usually tied to a governmental entity that has received state or federal money to be given to individuals for a specified societal need, such as assisting children;
- Grant money is usually given as a means of serving a social good, such as
- Training and educating youth;
- Medical research;
- Creating jobs and helping new small businesses in a certain area;
- Funding for soup kitchens or museums; and/or
- Preserving historical sites;
- Grant money is NOT given for an individual to use on their personal needs, such as entertainment or consumer expenses; and/or
- Grant programs will never require a person to pay a fee for receiving the grant money if they are found eligible to the program.
As mentioned above, one of the key factors in recognizing a scam is that you will be asked to pay a fee for an opportunity. You should never have to pay for information on a grant program.
If you have been contacted by a free grant scam, regardless of the method of communication (email, phone, mail, etc.) you should immediately report the scam to your local or state consumer protection agencies. Additionally, you may also submit a written complaint with the Federal Trade Commission. Once again, the FTC is the governmental agency that oversees deceptive advertising and will be able to bring a civil and criminal action against the defrauders on your behalf.
In general, there are two types of monetary remedies that are available under the FTC which may serve to help the victim of the scam recover lost funds:
- Civil Penalties: A civil penalty is a statutory amount required to be paid by a defendant for violating an FTC rule or order.
- It is important to note that the FTC does not have statutory authority to assess fines or seek civil penalties for an initial violation of the FTC Act.
- However, the FTC can seek civil penalties if a defendant violates a previous FTC order, and for violations of specific FTC statutes; and/or
- Consumer Redress: In some cases, the FTC may seek an order requiring that defendants turn over money they obtained illegally so that it can be used to compensate the plaintiff for the harm caused by the defendants’ fraudulent acts.
If you wish to get a refund from a scam artist individually, you will most likely fail. However, you may have success in filing a claim with your financial institution, as well as letting the state and federal authorities pursue the scam artist on your behalf. The proper authorities will be able to pursue the grant fraud and identify the scammer. Once the scammer has been identified, then you may be able to pursue a private civil lawsuit against the scammer in order to recover any lost funds.
Should I Contact an Experienced Consumer Fraud Lawyer?
If you have been targeted by a free grant scam, or have fallen victim to a scam, it is in your best interests to consult with an experienced consumer lawyer. An experienced financial lawyer that handles consumer fraud issues, will be able to help advise you regarding your best legal options.
Additionally, if you have fallen victim to a scam, an experienced attorney may be able to help you identify the party behind the scam. Then, you may be able to bring a private lawsuit against the party that defrauded you for the civil damages you suffered. Finally, an experienced consumer attorney will also be able to represent you at any in person hearing, and help you recover the money you lost.
