How To Avoid Grant Scams
Getting excited about the prospect of receiving free money is easy. For low- and middle-income families especially, grants can make a significant difference in life quality, and under the right conditions can even set some families on a renewed path to prosperity. The promise of free money can also be a risk. There are people out there who know just how exciting the possibility of monetary assistance can be. They also know that excited people sometimes make bad decisions.
There are legitimate opportunities available. There are also many scams and scam artists out there preying on those who are looking to make a better life for themselves. A quick Google search will reveal that there are a large number of websites devoted to providing information. Unfortunately, not all of those websites will have your best interests at heart, and some may even be trying to purposefully collect your private information to steal your money or even your identity.
How to Tell If Websites Are Scams
Before you start trying to apply for programs on a website or giving your private information away, make sure you recognize the warning signs that a website or an offer may not be legitimate.
Does it Come from the Government?
Most private organizations do not offer grants or do not use the term "grant" to describe their monetary assistance. Although private parties and private organizations do deliver grants, the term is most often used by government organizations. It is very rare to encounter grants that are delivered by entities other than the federal or local government.
If you see a website advertising a long list of opportunities from non-government sources, it's a good idea to check to see if those companies or organizations are legitimate. You can do this several ways:
Check the business' or organization's rating with the Better Business Bureau
Research the organization's history individually using web searches
Check to see if the organization has a phone number that you can call to verify its legitimacy
Some private organizations do offer assistance, but the criteria are usually as strict as government programs. Always check out the donor organization carefully, and make sure you are looking at a web page run by the organization that runs the program.
What's the Purpose?
Most grants are very specific, and the number of programs is very limited. Most financial assistance available to individuals and families is for housing and education. Beyond that, the number of legitimate opportunities is very limited. If you see offers or advertisements offering money outside of those areas, be extra cautious. In particular, avoid offers that appear to be providing money to specific racial or ethnic backgrounds. By law, the government cannot use race or ethnicity as a criterion for any assistance program.
Are You Looking at a Third-Party Website?
This one is crucial. Although some programs do have online applications, government grants will never allow you to apply on a third party website. If the site listing the opportunity does not provide a link to an official government website and instead tries to get you to complete an application on their website, you should not trust them. The government does not give third-party organizations the right to collect information or accept applications their behalf.
If you want to apply for a government grant, go directly to the government website that offers the online application. In some cases, you'll find that the application is only available on paper. If the government website says the application is paper-based, you should avoid any third-party website that claims to offer an online application.
Do Not Pay an Application Fee
If a website is asking for an application fee, stay away. Assistance programs are usually need-based. While there is some competition to get them (e.g., other applicants may have more need), you will never have to pay for that application. If a website is asking for a fee to complete the application, do not pay it.
For example, the Free Application for Federal Student Aid (FAFSA) is always free. Every year, websites pop up asking individuals to pay a fee to complete the FAFSA, even though the FAFSA indicates very clearly in its name that it is free. Still, some people fall prey to FAFSA scams due to websites that look legitimate.
Check For a ".gov" Web Address
Only government websites can use the ".gov" web address! Most web addresses can be handed out to anyone who pays the cost. The exceptions are ".edu," which accredited post-secondary educational institutions can use, and ".gov," which is exclusively used by government agencies. You should be wary of any website that claims to be a legitimate government source but does not have a ".gov" web address. If the website claims to be a government source but is not using a ".gov" web address, be cautious or find another source.
For reference, the official grant website for the US government is Grants.gov.
Never Provide Private Information to Third-Party Sites
If the website you are on is asking for private information, including social security numbers and bank account information, do not provide it to them, especially if the website is a third-party site offering access to government programs. Don't pay them, and avoid entering any information about yourself that someone could use to steal either your identity or your money.
If a Site Is Collecting Information, Check For Proper Security Measures
If you have found a legitimate site that needs to obtain some private information, make sure that it has proper security measures in place. For this, check the upper left-hand corner of your screen beside the website address, and look for an "HTTPS" and a green lock symbol, which indicate that the website is using a high-level form of encryption. Websites without this security measure are highly vulnerable to cyber security attacks. Meanwhile, it's difficult for illegitimate websites to obtain HTTPS security certificates, as the website owners must verify the legitimacy of their websites to get it from most certificate authorities.
Never Trust E-mailed Advertisements
The federal government will not send out e-mail advertisements for assistance opportunities. If you receive an e-mail advertising specific grants, do not trust it, and do not click on any links or download any documents included in the email. Instead, search for the granting organization on Google, confirm that the program exists, and review it there.
Can I Report Scams?
If you believe a website is engaging in fraudulent activity related to grants, contact the proper authorities. For online scams, your main point of contact will be the Federal Trade Commission.
You can file an online complaint with the FTC, or you can call them at 1-877-FTC-HELP (1-877-382-4357). For the hearing impaired, use TTY: 1-866-653-4261.
Don't Be Discouraged
There are real grant programs out there, though they are limited. Any legitimate website dealing with grants will tell you up front that there are limitations, and will never promise what they can't deliver. If you are facing severe stress or have documented needs, or if you meet the published criteria for an assistance program, go out and apply. There are no guarantees, but there's nothing to lose by trying. Just avoid getting too excited, and get suspicious when anyone makes a big promise. As always, if it sounds too good to be true, it's probably not true!