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?

Before we get started, we suggest you take a look at this
week’s issue of Scamlines — What’s New in Scams?

We also recommend you check out the most popular
articles from our other sites during the past week:

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Home Surveillance Isn’t Just for the Rich and Famous: Home surveillance can be made affordable for everyone once you know how.

Getting a Head Start on Shopping for Valentine’s Day Gifts: Ideas for Valentine’s Day gifts for those who don’t even know where to start.

Is Organic Chicken Worth the Price, or Not? Find out the benefits of eating organic chicken and if it’s really worth the hassle and price.

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 Grants.gov or
GovLoans.gov.


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.