FTC Consumer Alert
Federal Trade Commission Bureau of Consumer Protection Division of Consumer & Business Education
‘Free Government Grants’:
Don’t Take Them For Grant-ed
“Because you pay your income taxes on time, you have been awarded a free $12,500
government grant! To get your grant, simply give us your checking account information,
and we will direct-deposit the grant into your bank account!”
Sometimes, it’s an ad that claims you will qualify to receive a “free grant” to pay for education
costs, home repairs, home business expenses, or unpaid bills. Other times, it’s a phone call
supposedly from a “government” agency or some other organization with an official sounding name.
In either case, the claim is the same: your application for a grant is guaranteed to be accepted, and
you’ll never have to pay the money back.
But the Federal Trade Commission (FTC), the nation’s consumer protection agency, says that
“money for nothing” grant offers usually are scams, whether you see them in your local paper or a
national magazine, or hear about them on the phone.
Some scam artists advertise “free grants” in the classifieds, inviting readers to call a toll-free
number for more information. Others are more bold: they call you out of the blue. They lie about
where they’re calling from, or they claim legitimacy using an official-sounding name like the “Federal
Grants Administration.” They may ask you some basic questions to determine if you “qualify” to
receive a grant. FTC attorneys say calls and come-ons for free money invariably are rip offs.
Grant scammers generally follow a script: they congratulate you on your eligibility, then ask for
your checking account information so they can “deposit your grant directly into your account,” or
cover a one-time “processing fee.” The caller may even reassure you that you can get a refund if
you’re not satisfied. In fact, you’ll never see the grant they promise; they will disappear with your
The FTC says following a few basic rules can keep