NCL Personal Finance Issues
NCL's Fraud Center was recently contacted by a woman we'll call "Maureen." Maureen received a phone call from a woman who said she was a "customer service representative" from the United States government who was happy to inform Maureen that she was "eligible" to receive a government grant in the amount of $5,600. The friendly woman on the phone informed Maureen that, in order to receive her money, all she had to do was pay a onetime "processing fee" to the tune of $1,100. Maureen quickly wired the money to the address she was given, only to learn that she had to pay an additional $419 in order for her grant to be "released." Maureen was now growing concerned and began to ask why she had to pay so many fees. The caller calmly explained that Maureen's grant was "guaranteed" as soon as she made the final payment, which Maureen reluctantly made. Unfortunately for Maureen, the guarantee was bogus and the only thing she got was a $1,500 hole in her bank account.
With high unemployment and a still sluggish economy, many Americans are on the lookout for new opportunities to get some cash -- a fact that scammers are well aware of and eager to exploit. Government grant scams have been a frequently reported scam at NCL's Fraud Center in recent months. A typical scam can go one of two ways: the scammer requests a "processing fee" or "security deposit" (as in Maureen's case), or the victim is instructed to provide personal information, such as bank account and Social Security numbers, under the guise that the caller will "deposit" the funds directly into the victim's accounts. Once the caller has the victim's banking information, the scammer drains the account.
The experts at NCL's Fraud Center are tracking scams like Maureen's and reminding consumers of the most obvious red flags for spotting fraudulent government grants, such as:
- The government doesn’t telephone people or send unsolicited letters or emails to offer grants. If someone contacts you unexpectedly and offers you a grant, it’s a scam. Don’t provide your financial account numbers, Social Security numbers, or other personal information in response to such an offer. Crooks “phish” for that information to steal victims’ money and impersonate them for other illegal purposes.
- Government grants never require fees of any kind. You might have to provide financial information to prove that you qualify for a government grant, but you won’t have to pay to get one.
- Government grants require an application process. They aren’t simply given over the phone and are never guaranteed. Applications for government grants are reviewed to determine if they meet certain criteria and are generally awarded based on merit. If you didn’t apply for a government grant and someone says you’re receiving one, it’s a scam.
- Government grants are made for specific purposes, not just because someone is a good taxpayer. Most government grants are awarded to states, cities, schools, and nonprofit organizations to help provide services or fund research projects. Grants to individuals are typically for things like college expenses or disaster relief.
- Don’t be fooled by official or impressive-sounding names. Swindlers claiming to provide or help get government grants often invent impressive-sounding names and titles for themselves and the organizations they claim to represent. They operate under many different names and phone numbers, take your money, then often leave town to start all over again.
If you’ve been a victim of a government grant scam, know someone who has, or have been approached by a scam artist, contact your local law enforcement, your state attorney general and file a complaint with the National Consumers League’s Fraud Center at www.fraud.org.