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Don’t Get Caught Up in These Government Grant Scams

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During the pandemic, most Americans got used to receiving at least some free money from the federal government in the form of two rounds of stimulus payments. However, the federal government isn’t going to contact you out of the blue with free government grants. “Offers of free money from government grants are scams,” says the Federal Trade Commission (FTC).

Sure, you’d like to believe that the person reaching out to you via email, text or phone really is a representative from a government agency offering a grant to help you pay for unpaid bills, home repairs, education or home business expenses. But that’s not how government grants work.

The government will never get in touch about grants by contacting you through social media, emailing or texting. So, if someone does, that’s your first clue that you’re being contacted by a government grants scammer. Also, real federal grants require you to submit an application through a government website, not by applying on Facebook or submitting an application someone sent by text or email.

“If an individual contacts you about an opportunity to obtain free money in the form of a grant from the federal government, be extremely wary,” warns grants.gov, a division of the U.S. Department of Health & Human Services. “You are likely being targeted as part of a scam.”

Signs of a government grant scam

According to grants.gov, government grant scammers reach out with several red flags that should put you on “high alert” that you’re dealing with a scammer, including:

1. Surprise notices of grant eligibility

“The government does not contact individuals to award grants for which there has been no application,” according to grants.gov. “An individual who makes this claim is not from the government and could be trying to collect private personal data from you, such as your Social Security number, bank account number or other such information.”

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2. Application fees

You should never have to pay a fee to receive a federal grant. Providing financial information may be required as part of the application process for a real government grant, but it’s submitted through a government website, such as grants.gov. “There should be no cost to the applicant,” says grants.gov.

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3. No application necessary

Every grant from the federal government requires an application, according to grants.gov. You also can’t apply for federal grants over the phone or by email. Anyone who claims that the federal grant offered doesn’t require an application is trying to scam you.

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4. “Awards” from bogus government bureaus

If you receive an email telling you that the “Federal Bureau of Grant Awards” or some other department that doesn’t exist has awarded you $8,000, it’s a scam.

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5. Requests for information or money

It’s one thing to supply your Social Security number and other personal information on an actual federal grant application to apply for a grant. But if someone hawking free government grants asks you for that information to make sure you “qualify,” run. Grant scammers may even ask for your bank account information, claiming they need to deposit “grant money” into your account or pay upfront fees.

“Sometimes, scammers will ask you to pay those fees with a gift card, cash reload card, money transfer, or with cryptocurrency, says the FTC. “And that’s always a scam.”

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6. Asking for payment to get a list of government grants

You can find a free list of all available federal grants at grants.gov. So don’t pay anyone who promises to provide a list of government grants. “No government agency will ever contact you to demand that you pay to get a grant,” says the FTC.” And no government agency will ever ask you to pay with a gift card, cash reload card, money transfer, or with cryptocurrency. Not for a grant, and not ever.”

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What to do if you paid a government grant scammer

If you paid a grant scammer with a credit card or debit card, contact the card issuer and inform them it was a fraudulent charge. Then ask the issuer to reverse the transaction so you can get your money back. If the scammer made an unauthorized transaction from your bank account, contact your bank and do the same. If you paid with a gift card, contact the company that issued the gift card, let the issuer know the card was used in a scam and ask for a refund.

If you gave the scammer your personal information, visit IdentityTheft.gov to find out what steps you should take. Get a free copy of your credit report from AnnualCreditReport.com and monitor your credit report regularly, watching for new accounts fraudulently opened under your name. If you gave the scammer the same username and password you use on other accounts, change the login information on those accounts right away.

Always report government grant scams to the FTC. “When you report a scam, the FTC can use the information to build cases against scammers, spot trends, educate the public, and share data about what is happening in your community,” says the FTC. “If you spotted a scam, report it to the FTC at ReportFraud.ftc.gov.”

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