The ‘Free’ Federal Grant Scam Is Back

The Better Business Bureau has posted a warning to consumers about a free-grant scam that could cost victims the contents of their entire bank accounts. It starts with a message — phone, email, social media, anything — saying the government is offering free grant money, and your application is guaranteed to be accepted. They’re pitching a desirable idea: free money you can use for whatever you want.

Those who respond to the messages are asked to provide their checking account numbers in the grant application, so the government can deposit the grant directly into their bank accounts. Applicants are also charged a one-time processing fee, a seemingly small price to pay for a far more valuable return, the scammers say.

If you go forward with the grant application, you’re handing over the money in your checking account to thieves.

Government grants exist, of course, and you may have applied for one related to your work or education, but the BBB compiled a list of signs that you’re dealing with a grant scammer, rather than the government.

First of all, government workers don’t generally call, text or email you, especially if you’re not expecting it. The BBB advises consumers to regard unsolicited communication from the government with caution.

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Here’s a tip that goes beyond this scam: Any “free” offer that requires a fee isn’t really free. That doesn’t necessarily mean it’s a scam, but it can be misleading. When it comes to things like grants or scholarships, being asked to pay in order to receive money to which you’re supposedly entitled should send up a red flag.

Finally, remember that scammers are often impersonators, so you have to be a little skeptical of even the most official-looking things. Anyone can easily fake a number that pops up on your caller ID (it’s called spoofing), and it’s not hard to steal or re-create a letterhead or email template that looks like it is from a legitimate agency. Additionally, sometimes scam artists make up companies or agencies that sound real — like the Federal Grant Administration — so you should research who you’re dealing with.

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Having your bank account raided or identity stolen is not only psychologically traumatic, it can have a lasting impact on your financial well-being. You may find yourself in a situation where you can’t pay bills or make loan payments, which will hurt your credit score and cost you thousands of dollars for years to come.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.