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Avoid Grant Scams

Aug 17, 2007
The very idea of all of the ads that tell you that they have free grants to offer sounds too good to be true, and the fact is that in some ways it is. The ads claim that you will qualify to receive a grant for your business. They say your application is guaranteed to be accepted, and you never have to repay the money.

There is of course a catch that they don't mention. The Federal Trade Commission (FTC), the nation's consumer protection agency, warns you that money for nothing grant offers often are a scam: the grant isn't free, it isn't guaranteed, and often, it isn't even available to you.

Some people actually market free grants in classified ads, which begin by inviting consumers to call a toll-free number. If you call, a representative of the company will ask you some basic questions to determine if you qualify to receive a grant, and some of these questions include:

1. What's your address?
2. How long have you lived at this address?
3. Do you have a bank account?
4. Do you have at least $200 in your account at this time?

Next thing you know you are being asked to hold on the line while your eligibility is determined. After she congratulates you on your eligibility, she will ask you to pay a one-time processing fee that can range from anywhere from $100 to $300.

If you question this fee, you will then be reassured that the grant is guaranteed, and that if you're not COMPLETELY satisfied with your grant, you'll get a refund. However, she won't offer to tell you all the conditions for a refund.

The processing fee is said to cover finding a grant source and sending you the appropriate application package in the mail. However, you won't receive an application or a source. What you will get is a list of agencies and foundations to which you must write and request an application. This information is available for free at any public library or on the Internet.

Most sources of grant money don't give grants to individuals for personal need. Grants usually are given to serve a community good, such as bringing new jobs to an area, training young people, preserving a bit of history, funding soup kitchens or art museums, or researching medical issues.

If you ask an agency or foundation for money for personal reasons, you probably won't get it, even if you are financially needy. You are also not likely to get a refund from the grant broker because the conditions for a refund are nearly impossible to meet: you usually have to apply and be denied by each person on the list within 90 days.

If you're thinking about applying for a business grant, you need to remember that the applications are available to you for free and that anyone who guarantees you a grant is likely to be interested in their own gain, and definitely not yours. If you think you may have been a victim of a grant scam, file a complaint with the FTC.

The FTC works for the consumer to prevent fraud, deceptive and unfair business practices in the marketplace and to provide you with information to help you see, stop, and avoid them.

If you want to file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

The FTC will participate against Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
About the Author
Dwayne Garrett is the author of several eBooks and popular software applications, he also offers an affordable Government Resource that will help you to make sense of getting free grant money. Visit:

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