How to Recognize and Avoid Fake Government Grant Scams

If you're asked to wire money to receive a government grant, that's a scam.
September 22, 2016

The government provides financial assistance to many people. They don’t have much in common, except for one thing: They all applied for the aid packages they receive.

You can only receive grants you applied for.The government requires that people apply for government grants they’d like to receive.  All grants involve an application process, so if you haven’t applied for a grant, you will not be eligible to receive one.

Moreover, you never have to pay a fee in order to receive a “free” government grant. The government does not ask people to pay a “processing fee”—or any other kind of fee—in order to receive a grant that has been awarded to them.

Scammers take advantage of the confusion surrounding government benefits in order to perpetrate government grant scams.  In these schemes, a scammer calls or emails to tell you that you have received a government grant. Then, they ask you to pay a processing fee so that they can send you your grant.  However, there never was a grant in the first place, and the scammer disappears after they receive your money.

One of the main sources of confusion in government grant scams is the purpose of government grants. Most grants are for valuable services that the government wants to fund. Government grants are used to fund special projects, research, and recovery initiatives.  Sometimes, it’s possible for individuals to contribute to these projects and to receive a grant, but that is somewhat unusual.

The main exceptions to this rule are grants for students attending undergraduate or graduate school.  There are four types of federal grants that it is possible for a student to receive: a Federal Pell Grant, a Federal Supplemental Educational Opportunity Grant (FSEOG), a Teacher Education Assistance for College and Higher Education (TEACH) Grant, or an Iraq and Afghanistan Service Grant.

If you’ve fallen on hard times, there are many government programs that can help. Most of the assistance that the government provides to individuals is through government benefits.  To learn more about receiving government benefits, visit  The government also gives many people loans; unlike grants, you have to pay back government loans. You can find more information about government loans at


If you’ve been told that you have received a government grant, and you’re not sure if it’s legitimate or a scam, here are some questions to ask:

Did you apply to receive a government grant? And did you apply for this specific grant? If you didn’t, it’s definitely a scam.

Are they asking for a processing fee? You should never have to pay to receive a government grant.  If they are asking for payment, it’s a scam.

Do they want you to wire money? Scammers try to make it harder for you to recover money you send them by asking for a wire transfer of funds or money sent via Moneygram, Western Union, prepaid debit card, or gift card. The government won’t ask you to pay to receive your grant, and they definitely won’t ask you to pay using one of these methods.

Is this the first time the government has reached out to tell you about the grant? The government will mail or email you notification that you’ve received a grant before they call you. The Notice of Award is an important legal document, and it will go to the address that you provided to the government when you applied for the grant.  If the first time you hear about receiving a grant is over a phone call, it could be a scam.

Are they asking for personal information? The government should already have all the information they need if you sent in a legitimate grant application.  And they will never ask you for information like your credit card number or your banking information.

Can you verify the identity of the person offering the grant? If they truly are from a government agency, they should be able to tell you which agency they work for, and the name of the grant that is offered to you. Look up the name of the agency that they give you, and call that agency’s top consumer service line.  Then ask for more information about the grant that you have allegedly received.


More Resources

BBB Scam Tracker – Read about trending scams or report a scam. - The Government’s Official Page on Grants and Loans – A government site with all information on federal grants -- A government site detailing the loans the government offers to private citizens, including business loans, education loans, housing loans, and others

The FTC’s tips on government grant scams