Government Grant Scams
From Birch Gold Group
How to recognize a government grant scam when you see one? By following a simple rule and asking yourself, Did I apply for this grant?
If the answer is “no”, the grant is invariably a scam. While the government has a diverse share of handouts, the process of receiving money from the government is uniform across the board. You apply, most likely wait until a fair bit of vetting takes place, and then get approval from an official source.
Offers of free money from government grants? That’s a scam
Government grant scammers know that not everyone is familiar with the “did I apply” rule, and will often come out in full force after some form of disaster or incident occurred. It could be on a national scale, a city scale or even something that happened to you personally. Here, the scammers will pose as government officials and try to convince you they have a government check just for you they’d be happy to hand over if you’d just confirm a few details…
These nonexistent grants can either resemble an all-purpose “stimulus check.” They might target a specific area in your life that you might require financial assistance with, such as repairs or medical costs.
What do the scammers want? Oddly enough, they will often ask for a payment in exchange for access to the freely-available list of government grants. Sometimes the payment is described as an “eligibility fee” for a specific grant.
Other times, and perhaps more frequently, they will look to extract your personal information, including a credit card number, which will either be used for an immediate scam or stored for one at a later date.
The latest twist: COVID-19 relief fraud scams
Besides the usual lengths these scammers go to to appear as if they are working for the government, they will go a step further by compromising the profiles of people you might know. As such, your friend’s email or social media account might be hacked, and the fraudsters will be messaging you through it to tell you of this great handout that you should also cash in on.
The latest crisis has only given these scammers more room for maneuvering. They will now target senior citizens and tell them that the government is offering a financial incentive to stay at home in order to stop the spread of the virus. Alternately, they may pitch a pay-to-play vaccination scheme. And, to access this incentive, the victim at least has to part with their personal information or make some sort of payment that is purportedly related to insurance.
The stimulus check program launched over the past year has taken these scams to a new level, but the basics of scam prevention still apply.
And, if you fell victim to one of these scams and sent money, report the scam to the FTC. Get in touch with the financial institution through which you facilitated the payment and tell them what happened. If you acted quickly enough, there are good chances that the transaction can be canceled and that you can get your money back.
How government grant scammers identify targets
You might see government grant scams advertised online. You might also get a cold-call with spoofed caller ID so the call looks to be from a federal or state agency. Sometimes they use an official-sounding but nonexistent name, like “Federal Grants Administration.”
Some scammers rely on spam email and text messages claiming your “free money” grant is about to expire, and you must contact them for payment.
The primary warning signs of a government grant scam
According to the FTC, these are the hallmarks of this type of scam:
Scammers will contact you out of the blue. There’s no application process, no request on your behalf. The scammers expect us to believe the government employs a call center fully-staffed just to track down Americans who somehow qualify to get free money. In reality, receiving a government grant requires effort on your part. The same way you never get a job offer without actually applying for a job, you never get a grant without at least applying for one.
Scammers will ask for personal or financial information. Actual government agencies don’t ever ask you for your Social Security number, bank account information, or a credit card number. (You shouldn’t give this out to anyone.) That’s all a talented scammer needs to steal your money, your identity, or both.
Scammers will ask for money. Government agencies do not call and ask for a payment in exchange for a grant. And no one with good intentions ever asks for a payment via gift card, cash reload card, bank wire/money transfer, or cryptocurrencies.
Knowing what to look out for is key to defending against most scams. To help you detect and avoid financial scams, Birch Gold Group has pulled together an extensive resource guide that is now available on our website. The Birch Gold Group Scam Protection Resource Guide helps you identify warning signs and provides you with tips on how to avoid fraud.covid-19