The Truth About Government Grant Scams

Government grant scams, Medicare fraud, and the blog contest scam: Internet Scambusters #319

Today we have a Snippets issue for you. We’ll answer three questions:

– Is there such a thing as “free” government money — or are all these offers just government grant scams?

– What kind of little-known Medicare fraud are scammers now committing?

– What are blog contest scams?

Let’s check out today’s Snippets…

Money is Free But Not Easy — Beware Government Grant Scams

One of the most popular “free” money tricks to be on the lookout for in 2009 are government grant scams. As you’ll see, the money either doesn’t exist or someone wants you to pay for it.

These scams take two main forms: those where you see an ad, usually online, promoting easy availability of money from the government, often to finance a business; and those where victims simply get a call out of the blue telling them they’re entitled to cash from Uncle Sam.

The second type is most obviously a scam. You’re no more likely to have been given free government cash that you didn’t ask for than to have won a lottery you didn’t enter.

The scammers mainly call businesses claiming to be from a federal grant center and telling victims they have been randomly selected for a grant because they have been so good at paying their taxes.

They usually then say that large checks cannot be mailed for security reasons and ask for bank account details so the money can be deposited directly.

In other words, they’re phishing for details that will enable them to steal money and identities from their victims.

Bottom line: Governments — federal or state — don’t award grants this way.

The first type of government grant scam we mentioned though is less easy to spot because there are quite a number of genuine grants available for individuals and businesses — for example, programs linked with disaster recovery such as those in the aftermath of 9/11 and Hurricane Katrina.

There are also programs to help start a business or keep it going (not just for automakers or banks either!). They’re available especially for businesses in areas of new technology and in regions that are economically depressed.

So, not surprisingly, there’s a whole brigade of scammers promoting these grants, giving the impression they are easy to come by.

They have official looking websites and send out their enticing messages in spahams (misspelled intentionally) or regular junk mail. Some even advertise in legit magazines.

Many of them operate inside the law, charging a fee for supposedly helping you put together an application. But often the come-ons actually relate to grant programs that don’t even exist.

In many cases, they ask you to fill out a form they offer to submit on your behalf — for a fee, usually around $500 — and then use software to compile the application by extracting data from the form. We’ve seen examples of these and they are pure gobbledygook.

One government grant scam reported recently by the Miami Herald, and said to originate from Belize, says: “Would you like to get $50,000 for filling out a simple application? Government and private grants help people like yourself during these hard times. We’ve uncovered secret programs and they’re available to you…..”

Oh yeah?

The scammers usually encourage you to ask for vast sums of money, suggesting you may then get a portion of it. But the blunt truth is you will almost certainly got nothing more than a pain in the checkbook.

Bottom line: You don’t have to pay to get a government grant. But you do have to go through an application process, which you can do yourself. Start your research at or

Medicare Fraud: A Little Known Wrinkle

Scammers are using the names of doctors that have died to steal as much as $100 million from Medicare.

How it works: Using deceased physicians’ Medicare ID numbers, scammers file claims as medical suppliers for expensive medical equipment, such as oxygen tanks and wheelchairs. The claims get paid and the scammers take off with the money.

The sad thing is that Medicare was made aware of this problem over 7 years ago in 2001 — but it still has not been addressed.

Blog Contest Scams Seek More Site Traffic

One final con-trick on the increase to tell you about this week — the blog contest scam.

This is where a blogger offers a prize to readers for promoting his/her site.

Usually, you’re asked to post links to the blog on other sites. The reader who gets the most link-backs wins the prize. Or sometimes, the winner is picked randomly.

Many of these competitions are genuine and they are certainly a simple but clever way for bloggers to increase the traffic to their site.

Unfortunately though, there is an increasing trend these days for there to be no prize.

So here are three quick tips to avoid being caught out by the blog contest scam:

1. Never pay to enter such a contest.

2. If the prize is big — like a couple of grand — or there’s no closing date, it’s probably a scam.

3. Check the identity of the blogger. If the “about me” is fairly anonymous or looks bogus, then the contest is likely a scam. However, if the prize is small, you like the site and it looks legitimate, there’s a good chance it’s not a scam.

Whether the scammers are after your bank details, your money in the shape of a fee, or just your time to help increase their site traffic with the promise of a bogus prize, protect what’s precious to you by always being skeptical and by taking the time to check official sources of information.

That’s all for today — we’ll see you next week.