|REAL FRAUD WHICH COSTS ITS VICTIMS AROUND $250|
Example: [Collected on the Internet, 2004]
Origins: A new form of the "prepayment" con has been blanketing the US throughout 2004. Through it, the unsuspecting are lured by the promise of government grants into agreeing to have an "up-front fee" (usually $249) siphoned from their bank accounts. Though the fee is taken immediately, the grants never materialize, leaving those who have been led to believe they were about to be enriched to the tune of thousands of dollars sadly disappointed and a few hundred dollars poorer.
"Prepayment" frauds are far from brand-spanking new — many successful
Folks conned via prepayment schemes mistakenly believe they stand to gain vast amounts of something for practically nothing. Acting on that faith, they willingly part with funds they would ordinarily be loathe to spend yet which by comparison to the prizes about to be gained momentarily appear to be relatively small sums.
The 2004 'government grant' fraud operates on that principle. Those contacted by such cheats are told they are entitled to lay claim to government grants worth anywhere from $8,000 to $25,000. In return for their banking information and what now seems an insignificant processing fee
These promises and seeming proofs serve only one purpose, and it is not the protection of the consumer — they work to lend an air of legitimacy to the pitch so as to soothe the suspicions of those about to be taken. Very few will think to call those numbers; they will instead trust that what they have been told are guarantees are in fact valid ones. Those inquisitive enough to dial those
Those operating versions of this scam have in the past identified themselves as representatives of granting agencies with the names of the Government Grant Center, Consumer Grants USA, Ultimate Funding Inc., Government Grant USA, Federal Government Information Center, Federal Government Grant Information Center, National Grant Center, Federal Research Funding, Customer Care Plus, and Department of Revenue. However, that a purported grant facilitation entity is not listed above in no way proves it is on the
As to how the con is run, one of our readers who was contacted by someone intent upon victimizing him with the 'government grant' scheme reported this exchange:
[Swindler] My name is Alec Watson. (Female with a Indian or Pakistan accent.)
[Bryan] This is Bryan.
[Swindler] Can I speak with Bryan P. please?
[Bryan] Speaking. (I never answer in an affirmative manner anymore. I once had my long distance carrier changed because I said yes when they asked me if I was Bryan. Once they recorded my yes they had me saying yes to anything.)
[Swindler] Again, my name is Alec Watson from the Las Vegas Government Grant Processing Center. And you have been approved to receive an eight thousand dollar grant. We would like to verify your information. Do you live
[Bryan] Correct. Why would I get a grant for $8,000?
[Swindler] We have noticed that you have paid your taxes on time for the last
[Bryan] North Island Financial Credit Union.
[Swindler] Can you tell me what your bank routing number is?
[Bryan] No, I cannot.
[Swindler] Bryan, we can process you for $8,000 for a full free grant. We can automatically withdraw the processing amount from your back account. Do you think that a cost of $257 is worth receiving $8,000?
[Bryan] Well, if you're charging me $257 then it isn't free, now is it?
[Swindler] I can give you a few minutes to get your checkbook.
[Bryan] I am at work. I do not have a checkbook with me. (Not kidding
[Swindler] A deposit slip?
[Swindler] Sir, we cannot finish without your banking routing number; can you call someone at home and receive it?
[Bryan] Why can't you subtract the money from the grant?
[Swindler] Because we are not allowed to touch the grant money. Did you get your checking information yet?
[Bryan] Please remove me from your calling list.
[Swindler] Bryan, you don't want the $8,000? We are not authorized to remove you.
[Bryan] Ok, I found you on the web and it says you are a rip off. Please let me talk to a supervisor.
Bryan's example also shows how much he was pressured to provide his banking information. Someone less aware of the possibility of being conned might well have given up that number under such a barrage.
The scam succeeds as well as it does thanks in part to the many television commercials touting free government money. (Such advertisers are vending books containing the contact information for a variety of government grants, loans, and subsidies.) Though there are genuine government grants to be had, they are not available to just anyone for no purpose. Forget about the ads on TV — there are not untold troves of government funds available just for the asking. Grants are awarded on the basis of specific criteria having been met for specific programs. Such grants are very strictly administered, require the completion of a great deal of paperwork, and are overseen at every step. These are not "Fill out a simple form, then cash a huge check" types of propositions; these are "Prove to us that you qualify under this program then, provided you are engaged in the activity we are interested in fostering, we might subsidize some of your costs" sorts of deals. The hoops to be jumped through are many and varied, and there is precious little by way of a freebie to it.
Regarding the government grant scam, keep these three points in mind:
- The U.S. Government does not telephone people to offer them grants.
- Grants are never guaranteed, nor are they issued for no apparent purpose, so folks should be downright suspicious of any talk of grants where the words "free" or "guarantee" are bandied about.
- Real government grants require extensive documentation with great attention to detail. There is nothing simple or painless about securing a government grant.
How To Avoid Falling Victim To Prepayment Scams:
- Above all else, have nothing to do with 'deal of a lifetime' offers that require payment in advance of fees. Do not fall in with schemes whereby you are required to prepay taxes on lottery winnings, or pay to have a prize shipped to you, or are to be charged a loan application fee. Do not pay someone for the privilege of working for them.
- With regard to 'free government grants' come-ons, disabuse yourself of the notion that the U.S. government is in the business of providing grants (aka free money) to whichever of its citizens have made it their habit to pay their taxes on time. (Rather, the U.S. government offers a disincentive to those who are tardy with their payments — it assesses penalties for deadlines missed and charges interest on the amounts overdue.)
- Stop believing in the chimera of "something for nothing."
Levine, Steve. "Government Grant Scam." WROC-TV [Rochester]. 21 July 2004   (6 p.m. broadcast). Mulkins, Phil. "Tell Us Your Bank Account Number, Etc., Etc." Tulsa World. 16 August 2004 (p. A2). Roesler, Richard. "Agencies Warn of Grant Scheme." [Spokane] Spokesman Review. 23 July 2004 (p. B1). Sabatini, Patricia. "Never Give Unknown Callers Bank Account Number." Pittsburgh Post-Gazette. 22 October 2004 (p. B16). Williams, Fred. "Scam Uses Phone to Get 'Up-Front Fees.'" Buffalo News. 20 October 2004 (p. B7). Wyoming Tribune-Eagle "BBB Warns Local Consumers About Government Grant Scam." 2 December 2004 (p. A2).