Scam alert: Be wary of promises of 'free money'

 

The Government of Canada recently warned that people are increasingly falling victim to ‘grant scams.’

These scams typically offer “free money” from the federal government. The truth is, federal grants are rarely awarded to individuals seeking personal benefits, and applying for a grant is completely free.

Here are some of the more recent grant scams people have fallen victim to:

Business grants

Scammers use websites that look like official government sites to attract people looking for small- and medium-sized business financing.

These sites:

  • Advertise “special access” to government funding programs
  • May use Government of Canada logos and wordmarks and the Canadian flag
  • May have official-sounding names
  • Part of the application may even request the draft of a business plan.

The site asks you to pay an upfront fee, either to receive a list of available grants or to complete the application. In some cases, the site may ask that you open a new business bank account to receive the money. Once you provide the details of the bank account, the scammers may use the account to launder money. You never receive any money.

Government grant and loan services are offered free of charge by government departments or agencies. No one can guarantee government grants and loans. Private sector companies are not involved in the approval process of government grants and loans.

Government grant scam

Scammers use ads that state you may qualify for free money that you can spend on anything. You complete an application and receive confirmation that you qualify. To get the money, you need to pay an upfront fee. The more you pay, the more you’ll get.

In a variation, one of your trusted friends contacts you via social media to tell you about a free grant they got from a government grant program. They encourage you to apply as well. Unfortunately, the messages are from a scammer who hacked your friend’s account.

These grant offers are completely fake and no grant is ever received.

Weight loss grants

Scammers use ads for free weight loss grant programs to promise to pay most of the weight loss program’s fee. After you submit an application, you receive a confirmation email stating that you qualify. Every applicant does.

The scammers refer you to a preferred vendor, where you’ll need to pay an upfront program fee. You follow all the rules and lose the weight by the deadline. After requesting the promised grant, you receive no money.

To learn more about grant scams, visit the Government of Canada website here.

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