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What Are Free Grants?

"Free grants" are advertisements or offers that promise government money upon application. Usually, they guarantee that your application will be accepted. They may also claim that the money does not have to be repaid. These grants are usually offered for:

  • Home businesses
  • Education
  • Home repairs
  • Unpaid bills

The Federal Trade Commission (FTC) has warned that these "grants" are scams. The "free grant" is not free, your acceptance is not guaranteed, and the "free grant" may not even be available to you or the purpose that you want to secure one for.

What Does a Typical Scam Look Like?

Many "free grants" will appear in classified ads. If you happen to run across such an ad and call its toll-free number, you may be asked a series of questions to determine your "eligibility" for the grant. These questions may only serve the purpose of attempting to give you a sense of the company's legitimacy.

The telephone representative may then ask you to pay a "processing fee." Then, the representative may tell you that your grant is guaranteed and that a refund is available if you are not satisfied, although the representative may leave out the conditions or other details for receiving a refund. You may be told that the processing fee pays for finding a grant source and sending you the application, but information regarding grant sources and grant applications can be found at a library or on the Internet at no cost.

What Should I Look out For?

There are certain things that you should know about legitimate government grants:

  • Grant money is usually NOT given to individuals for their personal needs.
  • Grant money is usually given if they are to serve a social good. This may include:
    • Training youth
    • Medical research
    • Creating jobs and helping new small businesses in an area
    • Funding for soup kitchens or museums
    • Preserving historical sites
  • If you wish to get a refund from the scam artist, you will most likely fail. Typically, the conditions require you to have applied and been denied by each source they provided you with.

If you believe you have encountered such a "free grant" scam, you should contact the FTC and file a complaint.

Should I Contact an Experienced Consumer Fraud Lawyer?

A lawyer may be able to help you spot a free grant scam. A lawyer can also help you deal with the FTC and any other legal issues you may have.

Photo of page author Kristen Johnson

, LegalMatch Legal Writer

Last Modified: 07-08-2014 10:29 AM PDT

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