Each week, the NTIC Cyber Center highlights a different social engineering scam impacting individuals and communities within the National Capital Region. We encourage everyone to share this information with friends, colleagues, and loved ones to help reduce their risk of becoming a victim of financial fraud and identity theft.
Government grant scams are a type of social engineering scheme in which perpetrators use the promise of grant funding to steal money and/or elicit personally identifiable information (PII). Scammers notify victims that they qualify for government grants, requesting a fee in order to process the grant. If victims pay, the perpetrators will either flee with the money or request additional payments, citing unforeseen circumstances or complications. These fraudulent grants are advertised as free money to pay for education, housing repairs, business expenses, or other personal bills. To lend credence to their schemes, scammers masquerade as authorities from official government agencies or fictitious grant authorities, often using jargon and imitating official logos used by legitimate organizations. While government grant scams are generally perpetrated for financial gain, scammers may also take PII during the application process for identity theft. Scammers target victims using email, websites, voice messaging services, classified ads, and social media.
Scammers can even pose as friends and family members on social media to exploit victims. For example, an individual received a Facebook message allegedly from her best friend indicating potential eligibility for a $50,000 grant. In order to access the grant, the message indicated a $700 wire transfer payment was required. When the individual confronted her friend, they realized the friend's Facebook account had been compromised and was soliciting fraudulent grants. The individual was able to recover some of her money, but other victims have not recouped losses. A similar incident involved a victim who was told complications delayed payment of a grant, but was assured that continued payments would trigger release of the promised money. Eventually, the victim maxed out her credit cards, losing more than $30,000 and all her retirement savings. The Federal Trade Commission reports that government grant scams cost victims $8.5 million in 2018.
To reduce your risk of becoming a victim of a government grant scam, familiarize yourself with the following prevention and mitigation strategies:
Remember that www.grants.gov is the only official gateway for all federal grant-making agencies. A grant that is not reflected on this site is most likely fraudulent.
Ask yourself, "Did I apply for a grant?" The government does not give grant money to people who have not applied. Grants are usually awarded for research and educational pursuits. Individuals are rarely awarded grants; rather grants typically are awarded to universities, researchers, state government, local government, law enforcement, and planning institutions.
Immediately cease all contact with anyone who requests banking information, wired money, gift cards, or miscellaneous fees. The government will never make you pay for grants.
Scrutinize the identity of solicitors and request written official documentation to ensure grant legitimacy. Scammers often masquerade as well-established grant organizations by copying logos or using similar names in online or printed correspondence. To enhance “legitimacy,” they have been known to create fictitious government agencies and use the 202 area code to make calls appear to originate from an office in Washington, DC.