North Carolina Department of Justice

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Too good to be true: Watch out for free government grant offers

11/29/2007

By Attorney General Roy Cooper
 
You’re reading your local newspaper or surfing the Internet when suddenly you see an advertisement promising tens of thousands of dollars in free government grants. The ad claims that you can use this money for nearly anything – to pay your rent or mortgage, buy a home, or cover taxes, childcare costs or medical bills. Who wouldn’t want free money? But remember that old adage: if it sounds too good to be true, it probably is.
 
More and more of these grant offers have popped up in recent months. In addition to ads, telemarketers may also call to pitch their services to help you win a government grant, or to congratulate you for winning a grant you don’t recall applying for in the first place.
 
Whether you spot an ad or get a call, here’s how these schemes usually work: the company tells you that a ton of money is available through government grants for people just like you, and they can help you learn how to access these grants. They tell you that unlike a loan, these grants never need to be repaid and don’t require a credit check. All you have to do to get the money is fill out an application and pay the company a fee. Or they tell you that you’ve already won a grant, then ask you to hand over money or your bank account information before you can get the grant. 
 
Unfortunately, if you pay the fee you’ll likely never see one dime of grant money. 
 
My office recently stopped one company operating right here in North Carolina, Grant Writing Plus of Hickory, that charged people as much as $24,000 for help winning grants  but left consumers complaining that they didn’t receive a thing for their money. The company lured consumers with ads that said,“NEED $50,000? Up to $1,000,000 Guaranteed! Free Grant Money for Almost Any Reason!” 
 
While Grant Writing Plus is under court order to stop taking people’s money, there are other groups out there still trying to use the promise of a free grant to take your hard-earned money. To avoid scams, follow these tips:
 
  • Beware of anyone promising 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 numbers.
  • 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, for example, to pay for emergency repairs after a natural disaster, fund research projects, start certain types of small businesses or cover college costs.
  • Don’t fall for outfits that guarantee you a government grant.  Legitimate government grant programs are competitive, and not everyone who applies gets funding.
  • Do your homework to make sure a company is legitimate before doing business with it. Find out the company’s name, its physical address, including the country where it’s based, and a telephone number so you can communicate with the company about all the important details.
  • Instead of paying a fee for help finding grants, check directly with federal, state and local government offices to find out about grant opportunities. Information about legitimate government grants and loans is available at www.grants.gov and www.govbenefits.gov .
  • Always check out a company with my Consumer Protection Division at 1-877-5-NO-SCAM before you decide to do business with them.
 
Attorney General Roy Cooper and his staff want to help North Carolina consumers make smart choices. We are here to be of service when you need us, but through consumer education efforts like these columns we hope to help consumers avoid problems from the start.
 
Note to editors: This is one in a series of columns that the Attorney General is distributing to educate consumers. If you have questions or would like to receive future columns via email instead of U.S. mail, please contact Catherine Nickalson at (919) 716-6409 or cnickalson@ncdoj.gov