BBB: Beware of Stimulus Grants Scams

March 14, 2009
Lucas Cromer of Fort Collins admits he should have known better. He was killing time on the Internet and checked out an offer featuring a smiling President Obama ready to share billions in stimulus grant money with him.

The offer — $1.99 to cover shipping for a “free” CD — seemed like a small price to pay if it meant receiving thousands in grants as a result of the President’s economic stimulus bills.

Problem was, when Cromer had second thoughts and decided to cancel, he couldn’t. The company, he learned later, had several aliases. The customer service number on the ad never connected him to a live voice. Six days after his credit card company removed the charge, another one — this time for $94.81 — appeared on his bill for the monthly membership fee that he inadvertently agreed to by virtue of requesting the CD. Until he canceled his card, the charge would keep appearing.

“It was a membership fee for nothing,” Cromer said. There is no service they’re providing. There is no one to talk to. I left numerous messages. Once you give them your credit card number, you’re done.” The only solution is to cancel the credit card and request a new one.

Cromer is not alone. Thousands of consumers nationwide have been taken in by proliferating online ads for “free” grants. In just the last month, the Better Business Bureau serving northern Colorado and greater Wyoming has received more than 194 complaints and 1,274 inquiries regarding companies offering help getting stimulus grant funds. “This is almost unprecedented,” said Pam King, BBB CEO/president.

Cromer was willing to tell his story in hopes that it will save others from falling for this scam found on popular Web sites, including Facebook. “The most painful thing is that it’s going to happen to other people. I’m doing what I can as a consumer to put information out there that these are fraudulent companies and they’re going to rip off a bunch of people before they’re stopped.”

This particular grant scam has many different disguises and is not always tied into the stimulus package. Some offer information on “free” education grants, business grants and even personal grants — all for a minimum shipping charge and monthly membership fee.

While it’s true that the Federal government awards billions of dollars in grants, most are designated to help students pay for college, to help businesses in specific industries and for research. Grant information — available at no cost whatsoever and with no strings attached — is available at and

Before providing bank or credit card information to any business you’re considering doing business with, request a BBB Business Reliability Report at

Start With Trust. Check out Luanne Kadlub’s BBB blog and find reliable consumer tips, information and alerts at or call 470-484-1348 or 800-564-0371.