6 Signs Of A Scholarship Scam

April 14, 2011
Within the last few years, the landscape of colleges and universities across the nation has changed. Achieving the test scores needed to be accepted to your dream school and paying for tuition once you’re there is much more difficult than it was 20, 10 or even five years ago. Dwindling federal funds and grants left a myriad of openings for scholarship and SAT prep scams to emerge.

The Federal Trade Commission (FTC) is warning consumers to use caution when approached by a company that is guaranteeing or promising scholarships, and using strong emotional appeal to get you to agree to share private financial information with them. Likewise, your BBB advises all consumers to use caution when buying SAT prep DVDs or courses over the phone or online.

While there are still many trustworthy and ethical companies out there with students’ best interest at heart, BBB is warning students and parents of students alike to be wary of these tell-tale signs:

Guarantees and promises: If you are approached by a company that assures you that you will receive a scholarship or higher test scores, but only if you sign up with them now, remember that legitimate deals are rarely one-time offers.

  • Exclusivity: Be wary of companies that tout information that no one else could provide you. Most scholarship lists are public information, and while there are legitimate companies who compile lists you should know that none of that information is limited to just you.
  • Requests for personal information: Whether they are offering you a list of scholarship opportunities or a series of classes to prepare for the SAT or ACT, make sure you see and understand the details of what they are proposing before you hand over your personal information. It is critical that you make sure you are giving your money to an ethical business.
  • Advance fee: Don’t pay ahead of time for a company to find you a scholarship. Be wary of giving money to a representative who cannot answer all of your questions to your satisfaction, but requires upfront payment for services yet to be rendered.
  • · Awards for contests you never entered: The chances of you being awarded a scholarship you never applied for are very small. Don’t be fooled into giving away personal information: If you receive a phone call from a representative claiming you have been chosen for a scholarship, ask for more information in writing, and make sure that you keep a detailed list of the scholarships for which you did, in fact, apply.
  • Phone calls claiming that your son/daughter requested a program: Often, SAT/ACT prep course scammers will call households claiming that the parent’s student requested the company’s program. This pressured parent will transfer hundreds of dollars and personal information over the phone only to discover later that their child has never heard of the company.

BBB reminds you to always come prepared with questions for the company’s representative. If you do the proper amount of research on the company or service from which you are intending to buy, then you are far less likely to be the victim of a scam. Also, check with www.tucson.bbb.org to find business and charity reviews on companies with whom you are considering doing business.