Heard of Stimulus Grants? Scams Abound

by Silicon Valley Blogger on December 9, 2009

There’s no economic stimulus check in the horizon, but some people want you to believe otherwise.

So where’s your piece of the stimulus pie? These are desperate times, and unfortunately, more people are finding themselves grasping for their own personal bailout, looking upon our government to offer them that lifesaver. Here’s one thing that really got my goat though: it’s this whole business of stimulus grants.

Heard of Stimulus Grants? Scams Abound

What is this all about anyway? Apparently, unscrupulous outfits out there want you to believe that citizens can apply for grants. The truth is, stimulus grants do exist — there’s a place for private grants in the stimulus package details — but they are available to groups that fulfill certain requirements and perform certain functions. These grants aren’t there to help us pay our bills. The unfortunate thing is that scammers are contacting families, claiming that some serious stimulus money is headed their way. There’s the case of this family that was told that they were approved and given access to a government grant of $25,000 as part of the economic bailout:

 
The questionable intermediary (agency) called Grant Writers Institute tells them this:

Our government released $700 billion into the private sector. What you probably don’t know is that there’s another $300 billion that must be given away this year to people just like you.


The victim inquires about the grant (and who wouldn’t, when $25,000 sounds like it’s within your grasp), and the agency ups the “prize” (or hook / bait) to $75,000. The family is promised $75,000 if they send in $500 to the agency to handle the paperwork needed to secure the money. Sounds familiar? This sounds like so many scams that involve promises of riches if you send in some dollars for “processing fees”. And the sad thing is that there are people out there who are actually addicted to this sort of scam!

As the story progresses, it shows just how one mistake can lead to many more:

Mistake #1: The debt-laden victim puts the $500 on their credit card, to make their payment quickly. Quick access to credit sure makes it easy to jump into these types of schemes. Then again, using credit can turn out to be a good thing during cases like this, since you can always dispute a questionable transaction. Someone who gets scammed and uses their credit card in the process may have some leeway with their issuer by working to reverse the transaction. Isn’t this so?

Mistake #2: While anticipating the big payout, the victim makes huge plans to renovate her home (floor, cabinets, counter tops, new bathroom). Without a windfall, she actually wouldn’t be able to afford this because she’s deep in debt due to medical conditions. The saying “don’t count your chickens before they hatch” strongly applies to this situation. And not to be facetious, but even if the chickens do show up, it would be best to apply it directly to the debt, rather than to home renovations, in this particular case.

To avoid scams like this, the key here is to get informed. Know what’s going on with the economy, the financial industry and the government programs that are being made available to consumers out there. And never trust something that appears in your mail (whether it’s email or snail mail) that promises you something that sounds way too good to be true. Remember that there NEVER ever is anything that’s “too good to be true”. Whenever you get free offers, find out what kind of catch exists; if some nebulous person or agency wants you to send them money and you don’t know who they are, then tread carefully. Or you could just be the perfect mark.

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{ 9 comments… read them below or add one }

1 John DeFlumeri Jr December 10, 2009 at 1:47 am

Thanks for bringing these scams up publicly. It is horrible to hear of people being robbed so bad, especially when they are already desperate. This scam crap will never end, so we have to detect them constantly.

John DeFlumeri Jr

2 Studenomist December 10, 2009 at 6:46 am

Thanks for the link SVB! It’s always a pleasure when a blog you follow mentions you.

3 Silicon Valley Blogger December 10, 2009 at 11:01 am

What really surprises me is that there are people who are addicted to scams. I read somewhere how there are people who keep participating in online or mail scams, hoping to strike it big, even when they are told these are scams. These are folks who refuse to quit being victimized. They refuse to listen to family who often implore them to stop giving in to obvious fraudulent activities. This is similar to those situations when people are addicted to lotteries and slot machines.

No doubt, there are much cheaper ways to fill the void….

@Studenomist, always a pleasure to feature your articles!

4 Edwin December 10, 2009 at 12:52 pm

The sad part is it’s not only these scam companies that are scamming people. Legitimate financial institutions will tend to send out their fake “checks” which are just an extremely expensive cash advance on your credit card. Unfortunately, this type of thing will never go away because as the saying goes, “a sucker is born everyday”

5 Manshu December 10, 2009 at 5:13 pm

Gosh, this is really bad, I hope these people find help and don’t get scammed off like this.

6 Ken87 December 11, 2009 at 3:04 pm

I was clicking around the other night and noticed an advertisement for a FREE TV with purchase at their stores. I expected to see something pretty cheap, and was surprised to see it was a name brand. I have needed a TV for a while now so I decided to look at this further.

The fine print is what killed me though:

Please allow eight weeks delivery for merchandise redeemed online.

You DON’T ACTUALLY GET THE TV. You get a voucher for a TV — that you’ll get in 8 weeks and will at that point be a lot less expensive.

So, as I’m wont to do, I came up with two options if you need new glasses and would love a new TV / camera:

Option 1:
Pearle Vision

$350 for 1 pair of eyeglasses.
Your “Free” Camera Arrives in February (if you remember to redeem your voucher)
Total: $350 (Start taking pictures in February — in overpriced glasses.)

Option 2:
Online Retailer, for example http://www.eyeglasses.com (You can use the code UPS1DAY for free 1 day shipping.)

$120 for 1 pair of eyeglasses.
Order your Canon A470 from Amazon for $93 + $10 shipping (it arrives the day after tomorrow)
Total: $143 (Save over $200 and get the camera this week).

Don’t let these marketers trick you. We are too smart for them.

7 Katie Adam December 12, 2009 at 3:37 pm

“These grants aren’t there to help us pay our bills. The unfortunate thing is that scammers are contacting families, claiming that some serious stimulus money is headed their way. There’s the case of this family that was told that they were approved and given access to a government grant of $25,000 as part of the economic bailout”

I have actually seen many of these advertisements floating around. They do require an upfront payment. I think its terrible to be taking advantage of peoples good nature and ignorance seeing that most people are struggling financially anyway.

8 David December 14, 2009 at 10:15 am

Wow, had no idea…people really do come up with amazing ways to try to scam others. I would imagine it would take less work to just get a job! Thanks for the mention.

9 Ivan February 19, 2010 at 6:20 pm

I think scams have become part of everyone’s day to day lives. And people have learned to live with this. It’s just that we have to be cautious with every move.

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