Back in 2008, many individuals were defrauded by a group claiming to be tied to the US Government offering access to grant money. Luckily, these scam victims will be getting their money back! The FTC is now issuing $1.7 million worth of refunds to victims of this fake government grants scam.
The fraudulent organization, which was known as Grant Connect, advertised a service that would help consumers find and win grant money. In truth, it was little more than a way to bilk unsuspecting victims out of money by way of recurring monthly payments that they never agreed to.
Victory after a Long Day in Court
The case began in 2008, and the litigation was extensive and lengthy. The FTC has finally reached a settlement, however, with the 25 defendants in involved in the scam.
The defendants, who were both corporations and individuals, were running a site that was supposed to help consumers research and obtain government grants in a very comprehensive way.
As the FTC describes their scam:
“… the website operators sold many products online, including Grant Connect, which they described as a ‘unique consumer-friendly US government grant program that delivers all the tools for the consumer to search multiple databases, write proposals, and deliver polished plans.”
Individuals who signed up and paid for the service were left with a lot less than what they bargained for.
In reality, the Grant Connect site simply had a bunch of completely unhelpful and outdated information. Few grants were actually listed on the site, and the ones that did show up were incredibly hard to actually obtain.
How They Pulled It Off
The details of this scam are somewhat astounding. To start, the offending website was dressed up with all kinds of photos depicting President Obama, Vice President Biden, and more stars and stripes than you can shake a flagpole at. This lent an air of false legitimacy to the site.
This fake government affiliation was just one of several rules the sites broke before they were shut down. They also featured false testimonials and didn’t disclose the full cost of their products.
Consumers that signed up for the site were told that a fee between one and three dollars would get them access to Grant Connect’s “tools.” What they weren’t told was that a number of other services would be bundled with that membership, totaling about $70.
On top of this, consumers were not informed that they were going to be charged that $70 every single month.
The FTC pointed out that this violates at least three federal laws, one of which is the Electronic Funds Transfer Act. This important piece of legislation says websites aren’t allowed to debit bank accounts on a recurring basis without explicit authorization. Turns out, that’s exactly what Grant Connect was doing.
How to Protect Yourself
While the victims of this scam will reportedly be getting about 80% of their total loss returned to them, it’s not everyday that scam companies are actually held accountable. The best way to protect your money is to make sure you’re not defrauded to begin with.
It can be tricky to spot Internet scams, and it can be even trickier when these scams are dressed up in very official-looking clothes.
Always be on the lookout for anything that seems too good to be true and make sure that you do your research before you give any services your personal information or authorize that your bank account is debited. Always make sure that you read the fine print, as well.
Read everything you can, search on Google, and browse Scambook for complaints so that you can see if any other consumers have had any negative experiences. You can also use a Scambook to help get the word out if you actually happen to fall victim to something like this yourself.
So we want to know — have you encountered any scams like Grant Connect? How do you stay vigilant on the web?