A scholarship scam involves deception with educational and school scholarships. Parents increasingly turn to scholarship groups to assist them in covering the price of their children’s college education as education fees rise. However, scholarship fraud costs victims tens of millions of dollars annually.
The College Scholarship Fraud Prevention Act, which strengthened sentencing criteria for this type of fraud, was passed by Congress on November 5, 2000.
Never pay to submit a scholarship application. Walk away if a business asks you to pay a “processing expense,” “redemption fee,” or another upfront price in exchange for a scholarship or grant.
Many of these businesses don’t even provide you with a list of possible scholarship sources in exchange for your payment. Others claim that you have been chosen as a “finalist” for a scholarship award that you did not apply for or has a payment requirement.
These businesses will occasionally “confirm eligibility” by requesting details about your checking account or credit card, after which they will debit the account without your permission. Some might make a “money-back guarantee” available; however, it often comes with restrictions preventing refunds.
Numerous reliable businesses sell lists of scholarships. Others may charge you upfront to match your profile with a database of available scholarships, after which they will provide you with a list of rewards you might be eligible for. Additionally, there are online scholarship search tools. The distinction is that trustworthy businesses never ensure or promise grants or scholarships.
Identity theft occurs when criminals use your personal information to register new accounts, make false tax returns, rent or purchase real estate, or engage in other illegal actions. Identity theft can have long-term effects on a student’s life.
For example, it can make it difficult for you to sign a lease for an apartment or find employment after graduation. Your new beginning in the real world after college could resemble a nightmare more than a dream.
Towns and college campuses are not immune to identity theft. Students should exercise the same level of caution in the college library as they would in a busy coffee shop. Using insecure public Wi-Fi networks, having an identity thief watching you, and leaving personal documents out in your dorm room or in a public place are all ways that students might become victims of identity theft.
Along with adopting preventative measures to guard against identity theft, you can learn how to spot scams and other intrusive online conduct and avoid engaging in risky behavior.
Nowadays, most identity theft occurs online, where you would probably apply for a student loan. Avoid using websites that offer to install malware on your computer or clicking on links that appear too good to be true when you browse the internet.
Never open links or attachments in emails that look suspicious or come from users you don’t know when checking your email.
What Must I Watch Out For?
Scholarship scams frequently employ several slogans that serve as red flags for suspicious consumers. These consist of:
- “We’ll handle all the work”
- “You cannot acquire this information anywhere else.”
- “You’ve earned a scholarship from [national organization]”
- “You’ve been chosen by [national organization] to get a scholarship”
- “We will need a credit card or bank account number to hold the scholarship”
- “Guaranteed or your money back”
- “It will cost some money”
Going to a Seminar
Companies frequently advertise workshops where you may find out how to apply for financial help and scholarships. Some are genuine, while others are frauds. These occasions are typically high-pressure sales presentations when they threaten you with losing the alleged “opportunity” if you don’t pay right now.
During the seminar, don’t pay anything. Only con artists will demand payment right away or risk losing the chance. Solid opportunities aren’t presented through stressful strategies like pressure and hurry.
Before you make any payments:
- Do some research about the company and your other options.
- Do a web search for the company name and the words “complaint” and “scam.”
- Check out what other people have to say about them. You might discover that a school guidance counselor or a financial aid advisor can provide you with the same assistance for no cost.
Never believe “success” stories. The conference organizer might have paid attendees to share positive testimonials. Instead, request a list of at least three nearby families who have employed the firm’s services in the previous 12 months. Ask the families if they are happy with the goods and services they received in a follow-up conversation.
Avoid doing business with anyone who is reticent to provide information or respond to inquiries. Genuine business owners are happy to provide you with information about their products or services.
Find out the cost of the transaction and the company’s refund policy. Find out the entire price and get a written estimate. Regardless of the return, remember that con artists could make it difficult or impossible for you to receive your money back.
How to Approach Financial Aid or a Scholarship Search
Follow these steps as you begin your search for financial aid or a scholarship:
- To apply for financial help, complete the FAFSA form, which is free. The most crucial action you can take to obtain financial aid is this.
- Never pay someone else to complete or submit your FAFSA. That is most likely a con.
- Discuss your choices for financial help and scholarships with a guidance counselor (if you are in high school) or the financial aid office (if you are in college).
- Never pay to attend a presentation on how to obtain scholarships or financial help, particularly if they insist that you pay. That is most likely a con.
- Before paying someone for assistance with financial aid or scholarships, do your research.
Share these suggestions with anyone you know who needs money as well. You can aid them in avoiding fraud.
How Should I Respond if I Discover Such a Scam?
You should get in touch with the Federal Trade Commission if you think you may have fallen prey to a scholarship scam (FTC). The FTC has pursued scholarship scammers under the guise of “Project Scholar fraud.” It has resulted in court judgments banning fraud against 30 people and 11 businesses in the future. Refunds to customers or the US Treasury have also been the result.
How to Proceed If You Paid a Fraudster
Scammers frequently make payment requests that make it difficult to get your money back. The sooner you take action, regardless of how you paid a con artist, the better.
Report financial aid and scholarship fraud to your state’s attorney general.
Do I Need a Lawyer with Consumer Fraud Experience?
You could learn about your rights and how to recognize scholarship fraud from a consumer lawyer. If you believe you have a claim against a business or person, or if you believe you have been a victim, a skilled attorney may also be able to assist you in dealing with the FTC.
Pursuing a college education can help you achieve your long-term goals. Many people need scholarship assistance to do so. If you believe you’ve been scammed, contact an attorney today to protect yourself. You are not alone.