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How to Identify, Avoid, and Report a Government Grant Scam

Alex Huntsberger
Alex Huntsberger is a personal finance writer who covered online lending, credit scores, and employment for OppU. His work has been cited by, Business Insider, and The Motley Fool.
Read time: 8 min
Updated on August 19, 2022
man with beard holding his eyes open to show how to identify, avoid, and report a government grant scam
If you find it hard to believe that the government has decided to give you a bunch of money totally out of the blue, you're halfway home.

In theory, everyone would love to get a phone call saying they’ve earned free money. But in practice, these aren’t phone calls that anyone likes to receive. Why? Because they’re almost certainly a scam. Someone’s trying to steal your hard-earned cash or even your identity.

There are tons of ways that scammers can try to trick people, and they’re inventing more every day. On this blog, we’ve talked about almost two dozen types of scams, including payday loan call scams, online dating scams, and even reverse mortgage scams. Today, we’ll cover another type of scam you might not be familiar with: the “government grant” scam. Here’s how it works ...

What is a government grant scam?

Lisa Schiller is the Director of Investigations and Media Relations for the Better Business Bureau Serving Wisconsin. According to Schiller, here are the four traits that the majority of government grant scams have in common:

  1. “Advertisements or callers claim that you qualify to receive a free grant.
  2. “Callers may claim they are from a government agency or other organization and promises your grant is guaranteed to be accepted and that you'll never have to pay it back.
  3. “They may use official-sounding names (such as ‘The Federal Grants Administration’).
  4. “They may congratulate you on your eligibility....then ask for your checking account number so that they can ‘deposit your free grant directly into your account.’ Or they may ask you to cover a ‘one-time fee.’”

Of course, within this basic framework, there are many different ways that the scammer can try to work you over. Here are three such examples.

Via social media.

From Schiller:

"Very recently, a grant scam was circulating on Facebook. Consumers reported they were approached on Facebook by users sharing links for 'free' U.S. government grants. In the end, the grants don't exist and the messages were really attempts to steal personal information and money.

"The scam generally worked like this: You receive either a new friend request along with a message or a message from a current friend detailing information on free grant money from the government.

"Often times the message will list other Facebook users who have successfully received the money in an attempt to convince you they're legitimate. The message may include a link to a law office or phony government website.

"It's possible the scammers might even include a real government website to appear legitimate. In the end, you'll be asked for personal information and a payment for processing fees.

"The BBB believes scammers love to use social media because messages are perceived to be friendlier and more personal than requests via email."

Over the phone.

This example comes courtesy of lawyer, professor, and identity theft expert Steve Weisman, author of the Scamicide blog:

“Recently there has been an upswing in telephone scams involving phony federal grants. The scam begins with a telephone call from someone purporting to be from the Federal Grant Educational Department, US Grant Commission or some other real or phony government agency informing you that you are eligible for a substantial federal grant.

“Your caller ID may even support the scam by indicating that indeed the call is from a federal agency, however, caller ID can be fooled by a technique called 'spoofing' to make an illegitimate call appear genuine.

“What you are told that you need to do in order to receive your money varies somewhat from scammer to scammer, but generally involves you paying a transfer fee or application fee before they can send you the money.  Some scammers request your bank account number so that they can electronically deposit your check.

“This is a scam and any payment you make to the scammer is lost forever and you do not receive anything in return.  If you provide your bank account number, you will soon find your bank account emptied by the scammer.”

Through email.

And lastly, any scam that can be run by phone and via social media is almost certainly being run through email as well. Justin Lavelle, a scams prevention expert and Chief Communications Officer at explains:

“Scammers will often send out a mass fake email made to look like they are from the federal government. The email will say that the recipient has won a free U.S. grant to cover education costs, home repairs, business expenses, or unpaid bills.

“The email or message usually lists a toll-free number the reader must call for information. The recipient will then be asked to either wire funds for a processing fee or provide their bank account details so that the fee can be withdrawn.”

What happens when you email them your personal account info? The same thing that happens when you send it via Facebook Messenger or over the phone. Your money disappears, and possibly your identity as well.

How to identify a government grant scam.

Ask anyone who's applied for a government grant, and they can tell you that they’re pretty tough to get. So what are the odds that you, a person who never applied for one, are not only eligible but very likely to be approved?

Exactly. Lavelle explains the warning signs:

“If you didn’t apply for a grant, chances are it’s a scam. Real grant programs do not find eligible recipients. If you are asked to pay a fee, such as an application fee, chances are it’s a scam.

“Grant applications are free. They are publicly funded and sourced at the federal or state/county level. Any government grant, claiming to be for school or living expenses is not a legitimate grant. U.S. grants for a business are awarded to benefit that company.

“If the agency contacting you says they are from the 'Federal Grants Administration,' it’s a scam. That office doesn’t exist.

“If you are asked, by the caller, to provide your bank account information, it’s a scam. If this occurs, ask the caller to provide you with a written proposal.

Whatever the format,” says Weisman, “the claim is that your grant application is guaranteed acceptance and you will never be asked to pay back the money. In addition, the scammer will congratulate you on your eligibility.”

“Next, you will be asked to provide your checking account information so that your grant may be directly deposited into your checking account. You may also be asked to provide those account details or wire money to cover a processing fee,” says Weisman.

If you’re not sure that the offer is a scam, this request should clear things up.  But it’s not the only thing warning sign that sticks out ...

There is no Federal Grants Administration.

We know that we already said this, but it bears repeating. This isn’t so much a red flag as a brick wall. The second you run into it, everything should come to screeching halt.

From Weisman:

"Scammers sometimes say that they are from the Federal Grants Administration, but in truth, there is no such entity.  Government grants are not easy to get and if you have to pay money to obtain a free grant, it isn’t free. The government does not charge for lists of grant providers."

Weisman even goes onto name the places that people can go for government aid:

"If you are truly interested in information about federal grants, the only place to go is the federal government’s grant website of

"People looking for legitimate information about grants, loans and other financial aid information for higher education can go to the federal government’s website

"Information about federal loans for housing, disaster relief, education, and veterans benefits can be found at the federal government’s website

"Finally, for information about a range of other federal benefits for which you may be eligible, you can go to the federal government’s website"

How to foil a government grant scammer.

Schiller provides a very helpful list of tips, some of which apply to any kind of scam:

  1. "Don't give out your bank account or personal information to strangers.
  2. "Don't blindly trust your current Facebook friends. They may have been hacked. If the message seems out of character, contact them offline.
  3. "Don't believe everything you're told. Just because someone says they are from the 'Federal Grants Administration,' doesn't mean that they are. Be aware that there may be no such agency and take time to check it out. Websites are easily spoofed and faked. *Real government websites end in '.gov.'
  4. "Phone numbers can deceive. Con artists use spoofing to disguise ID systems. You cannot trust your caller ID.
  5. "Check to see what scams are being reported in your neighborhood (or any neighborhood)—and also report scams and fraud whether you've been a victim or not."

“To reduce the volume of telemarketing calls you get,” says Lavelle, “add your phone number to the National 'Do Not Call Registry.' You can do so online at or via phone at 1-888-382-1222."

If you get scammed, report it!

“If you feel you have become the victim of a grant scam,” says Schiller, “file a complaint with the BBB (if you have an address) or post your experience on our Scam Tracker (if you don't have an address) or report it to the Federal Trade Commission (FTC) or the FBI IC3."

According to Schiller, The BBB Scam Tracker can also be a great resource to research government grant scams:

“There have been 6,056 scams reported to Scam Tracker in the last three years regarding government grants. You can do a simple search on the home page (link above) and you can even find real examples that you can use.

"If you want to try to talk to some of the consumers that submitted this type of scam (or any scam) simply click on 'view' on the individual submission and then click at the bottom 'Law enforcement or media? Inquire about this report.'"

You can also search for scams on Weisman’s Scamicide blog. Meanwhile, Lavelle has more information on how to contact the right government watchdogs:

“If you suspect that you’ve been a victim of a government grant scam, you can file an online complaint with the Federal Trade Commission at this link. You may also file a complaint by calling toll-free at 1-877-FTC-HELP.

“The Health and Human Services Fraud Hotline will also accept reports of grant scams. The number to call is 1-800-447-8477.”

Don’t let a scammer get their hands on your hard-earned cash. Know the warning signs and then make sure to report their behavior; even if you keep yourself safe, you don’t want them victimizing another innocent person either.

Article contributors
James Lavelle - OppLoans Contributor

Justin Lavelle is a Scams Prevention Expert and the Chief Communications Officer of (@BeenVerified). BeenVerified is a leading source of online background checks and contact information. It helps people discover, understand and use public data in their everyday lives and can provide peace of mind by offering a fast, easy and affordable way to do background checks on potential dates. BeenVerified allows individuals to find more information about people, phone numbers, email addresses and property records.

Lisa Schiller

Lisa Schiller is the Director of Investigations and Media Relations for the Better Business Bureau Serving Wisconsin. She holds a B.A. in Communications and a B.S. in Criminal Justice from University of Wisconsin-Milwaukee. She has spent her career in the field of consumer issues, fraud and scams, white collar crime matters and investigating. At the BBB, she’s working to advance marketplace trust between buyers and sellers and promoting informed buying decisions. Lisa won Honorable Mention for an investigation by the Council of BBB in 2012 and first place for a single case investigation by the Council of BBB in 2013. She is a member of the Wisconsin Fraud Investigators Association (WAFI), The North American Consumer Protection Investigators (NACPI), the International Association of Financial Crimes Investigators (IAFCI), the Franklin Police Citizens Academy Alumni, and the F.B.I. Citizens Academy Alumni.

Steve Weisman is a lawyer, college professor at Bentley University and author.  He is one of the country’s leading experts in identity theft.  His most recent book is “Identity Theft Alert.”  He also writes the blog (@Scamicide) where he provides daily updated information about the latest scams and identity theft schemes.

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