Has anyone offered you “free money” in the form of a grant? We’re going to tell you about three different types of grant scams and how to avoid them.
While legitimate grants do exist, the Canadian Anti-Fraud Centre (CAFC) is warning people about scammers who offer guarantees of free money but have no intentions of following through with their promises. For that reason, it’s important to be cautious around promises of a grant because there’s a chance it could be a scam that leaves you empty handed. With information from the CAFC, here are three variations of grant scams to watch out for:
- Business grant scam
- The pitch: This scam works by offering financing to small and medium-sized businesses through a website, which may appear to look like an official government website (complete with spoofed Government of Canada logos or flags and an official-sounding name). These sites offer “special access” to government funding programs.
- How it works: The site asks you to pay an upfront fee, either to receive a list of available grants or to complete the application. They may even try and get you to open a new bank account and use it to launder money through. However, you never receive any money.
- Weight loss grant scam
- The pitch: Have you ever seen an ad for a weight loss grant? This type of grant scam promises to pay most of the weight loss program’s fee if you lose a certain amount of weight.
- How it works: After you apply for the grant, you get an email stating that you qualify (because everyone does). Once “approved” you are then referred to a preferred vendor, where you’ll need to pay an upfront fee to participate. Even if you follow all the rules, lose the weight and meet the deadline, you never get the grant that was promised.
- Government grant scam
- The pitch: You see an ad that says you may qualify for free money that you can spend on anything you want. However, you must pay an upfront fee before you see any of the grant money. Or, you’re contacted by a friend on social media and they tell you about a free grant they got from a government grant program and encourage you to try it out. Unfortunately, the messages are from a scammer who hacked your friend’s account.
- How it works: The grant offers are completely fake and no grant is ever received.
How to avoid grant scams
- Remember that government grant and loan services are offered free of charge by government departments or agencies – if you are being asked for an upfront fee, be cautious.
- Never give out personal or financial information to people you don’t know.
- Beware of strange messages from friends on Facebook. If you receive a suspicious message from a friend that seems out of character, contact them offline to confirm it’s them. They may have been hacked.
- Independently verify any website that claims to be a government organization. Websites, phone numbers, and logos can be easily spoofed and faked. If you’re ever unsure, contact them directly.
- Do your research. Find out what people are saying online about the company.
- Report scams and fraud to the Canadian Anti-Fraud Centre
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About Consumer Protection BC
We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.