The next time you get a card in the mail telling you that you’re “eligible” for a multi-thousand dollar federal grant, beware. Think twice before you call that 1-800 number. Even when the card reassures you that your “application is free”, don’t believe it. This has become a somewhat rampant scam by renegade “Federal grant representatives” to rake in a “service charge” of close to $400 per application, in some cases.
I found this to be the case of one such company which sent out cards from their base in Champlain, NY recently. I got one of these cards, and decided to try it out. The card lures the recipient with the promise of a Federal grant for education, home improvement, medical bills, etc. In fact, they guarantee a $5,000 grant. Okay, this sounds good so far. Maybe too good?
The application is “free over the phone”, but as you get caught up in the recorded conversation, where the “grant representative” obtains all sorts of financial information from the caller, you’ll find yourself getting charged nearly $350 for “service charges and handling fees.” Now, you have to ask yourself at this point ... service charge for what? Handling what? Mailing the package to your home? Well, that must be one mighty heavy package!
They have a clever way of getting information out of their victims, too. First, they get your license and Social Security numbers saying that they need this information for “verification purposes”. They have also been known to ask their victims the account numbers of checking and savings accounts so that they can “deposit” the grant check into the account. But think about it... when they have those numbers available to them, they have access to those accounts for fraudulent purposes and can cause havoc with the balance.
Now, a $5,000 guarantee for a mere $350 sounds like a reasonable deal. But, is it really? When sanity sets in and you change your mind and you call to cancel the application, it’s amazing to witness the antics these “Federal grant representatives” play wrapped up with a degree of arrogance that is beyond belief. After being insulted and whacked around with their heated words, it becomes increasingly apparent that this is no real organization, but a conglomeration of scam artists with hooks in their nose to catch your wallet on the fly.
You will be abruptly told that cancellation is impossible. They flatly refuse to stop the process because it is “already in motion”. This is a dangerous position to be in. Not only do they have the account numbers of the financial institutions at that point, they also argue that if there are insufficient funds to support their charges in the account, they will also charge you a cancellation fee. All this, and you can expect to not even see their “grant” package until about 2 weeks AFTER your payment to them has cleared. So, you are getting nothing at this point for a total of $350 and there is no way to cancel out.
You may now need to contact the state attorney general’s office to place a formal complaint against them for fraud and change any accounts that they are now privy to. Making a formal complaint to the state’s Better Business Bureau is also advisable. It’s an inconvenience, to be sure, to change accounts and report the fraud that was set in motion, but it is essential to get back on track.
Don’t be disillusioned about grants in general, however. Not all agencies that deal in Federal grants are fraudulent. So, how can you tell the difference? There are some criteria to keep in mind when selecting an agency to work with:
- Any agency that claims to GUARANTEE a grant for a price should be avoided.
- Do not, under any circumstances, give out personal or financial information such as Social Security numbers or bank accounts of any kind.
- It is always wise to check with the Better Business Bureau in the operator’s home state to see if there are any complaints against them before proceeding.
- Be sure you understand the cancellation policy of the agency well in advance of giving any type of consent for proceeding with the application process.
- Be sure you know the full name and ID number of the individual “Federal grant representative” you are dealing with.
- It pays to do full research on the agency itself before making any type of commitment. Find out where the agency’s headquarters are located and obtain the full name, address, and telephone number of the customer service department before making any applications.
- Beware if the agency is not a U.S. company. Many such scams are originating from Canada, especially those located along the northern borders of the U.S.
- Don’t be sucked into a deal that sounds good. If it sounds too good to be true, it probably is. And the best way to avoid this is to never make a commitment over the phone. Know who you are dealing with. And, don’t get caught up into believing that if you invest a little money into the application process, you will be guaranteed a given result. That’s just plain nonsense!
While the company that I came across was operating out of Champlain, NY, there are dozens of such companies that act out their scams throughout the United States. Many of these companies are headquartered outside of the U.S.. And all of them are out for one thing ... your money. Caveat emptor: Consumer, Beware!
