Better Business Bureau warns of federal grant scam

Staff Report

A steady stream of scams have been reported to the Better Business Bureau (BBB) throughout the summer and there seems to be no end to that trend. Most recently, consumers have contacted the BBB about calls regarding U.S. government grants.

Scammers claim to be federal workers and call individuals and inform them they have been selected to receive grant money.

Carol Finstein, of Waukegan, Illinois, received such a call.

“They said that there was a federal grant available to anyone that was either a senior citizen or disabled,” Finstein said. “They said that I was entitled to $7,000 but there were legal and other fees to pay in advance.”

Finstein was told that she should make the payment using a GreenDot card.

“It started with $500 and they kept asking for more and finally added up to $2,400. I borrowed the last $300 they asked for from a friend.”

The story the scammer told Hosea Blakely of Rockford was slightly different.

“I received a call from a Mr. Watson who told me that once a year guaranteed U.S. Government Grants are issued and I would receive $8,600,” Blakely explained. “All I had to do was place a call and within 30 minutes the money would be deposited into his account.”

The scammer then asked Blakely for his banking information.

These kinds of scams often have two goals,” Dennis Horton, director of the Rockford Office of the Better Business Bureau, said. “First, they want to bilk trusting consumers out of their money and secondly they target them for identity theft. Senior Citizens are particularly vulnerable in large part because they are at home during the day to receive the calls and they often get taken by surprise by these fast talking con artists.”

That was not the case with Mae Nichols, also of Rockford.

“I received a phone call saying they were from the United States government and they wanted to give me $8,000 for being a good citizen,” she said. “All they needed was my credit card number or banking and they would put it in there. I told them I can wait, just mail it to me. When they said no, I hung up on them.”

Additionally, Horton notes, “While it’s true the U.S. Federal Government does give out billions of dollars each year in grant money, most grants are given to help students pay for college or for specifically defined reasons such as for research or to businesses in particular industries.”

Following are a few basic rules that can keep you from losing money to these government grant scams.

  • Don’t give out your bank account information to anyone you don’t know. Scammers pressure people to divulge their bank account information so that they can steal the money out of the account. Always keep your bank account information confidential. Don’t share it unless you are familiar with the company and know why the information is necessary.
  • Don’t pay any money for a “free” government grant. If you have to pay money to claim a “free” government grant, it isn’t really free. A real government agency won’t ask you to pay a processing fee for a grant that you have already been awarded — or to pay for a list of grant-making institutions. The names of agencies and foundations that award grants are available for free at any public library or on the Internet. The only official access point for all federal grant-making agencies is
  • Look-alikes aren’t the real thing. Just because the caller says he’s from the “Federal Grants Administration” doesn’t mean that it is true. There is no such government agency. Take a moment to check the blue pages in your telephone directory to confirm whether or not the agency exists and is legitimate.
  • Phone numbers can deceive. Some con artists use Internet technology to disguise their area code in caller ID systems. Although it may look like they’re calling from Washington, DC, they could be calling from anywhere in the world.
  • Take control of the calls you receive. If you want to reduce the number of telemarketing calls you receive, place your telephone number on the National Do Not Call Registry. To register online, visit To register by phone, call 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to register.
  • File a complaint with the FTC. If you think you may have been a victim of a government grant scam, file a complaint with the FTC online, or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. 
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