North Carolina Department of Justice

North Carolina Department of Justice

North Carolina Department of Justice
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Grant scams fail to deliver promised cash

8/2/2011

By Attorney General Roy Cooper
 
One of the hottest scams this summer tries to trick people into paying for help winning government grants that don’t even exist. Grant scams use people’s hopes for money to start a business, go back to school or fix up their home to bilk them out of hundreds or even thousands of dollars. So far this year my office has heard from people who’ve lost a combined total of $25,000 to grant scams. None of them ever got one dime of grant money.
 
Here’s how the scammers usually operate: the company tells you that money is available through government grants for people just like you— and that they can help you learn how to get it. All you have to do is pay the company a fee. Or they tell you that you’ve already won a grant, and then ask you to hand over money or your bank account information before you can receive grant funds. In other cases, they may invite you to a seminar where they claim you’ll learn how to win grants.
 
The latest grant scam targets farmers, offering them a 5-year, $15,000 business plan that includes a grant-writing service. Two farmers in Burgaw were promised loans and grants of $371,000 by Valley Business Development. We attempted to contact the company at its Las Vegas address but representatives were evasive, and the company isn’t properly registered to do business in either Nevada or North Carolina.
 
My office has taken several grants scammers to court over the past few years, shutting them down and winning money back for consumers whenever possible. We’re preparing to go to trial soon in federal court on a grant scam that targeted lower income and older consumers.  Consumers who took the bait and made initial payments were re-victimized by “grant coaching services” after they failed to secure grants on their first attempts. 
 
Unfortunately, more grant scams are popping up, using the bad economy to try to get rich at your expense.   Here’s how you can avoid these scams:
 
  • Beware of anyone who promises you free or easy money in exchange for an upfront fee.
  • Don’t be fooled by telephone calls or official-looking letters that tell you you’ve unexpectedly won a government grant you didn’t apply for, and don’t give out personal information such as Social Security or bank account numbers to get a grant.
  • Steer clear of grant offers that claim you can use the money for anything you want. Most legitimate government grants given to individuals are for specific purposes, such as to pay for emergency repairs after a hurricane, fund research projects, start certain types of small businesses or cover college costs.
  • Don’t fall for outfits that say they can guarantee you a grant. Legitimate grant programs are competitive, and not everyone who applies gets funding.
  • Be skeptical about paying for brochures or other materials that are supposed to help you win a grant. 
  • Information about legitimate government grant and loan opportunities is available for free from federal, state and local government offices and online at www.grants.gov and www.govbenefits.gov . Students can also explore financial aid resources such as student loans at www.cfnc.org.
  • Always check out a company with my Consumer Protection Division before you decide to do business with them. Call us at 1-877-5-NO-SCAM or visit www.ncdoj.gov to check up on a business, report a scam or file a complaint.