Scholarship Scams
A Message from the Federal Trade Commission
Many companies advertise through flyers, campus newspapers, direct mail, and Web home pages that they can get students access to millions of dollars in unclaimed grants and scholarships. The Federal Trade Commission (FTC) encourages you to be well-informed about these companies and provides these tips: 1. Determine whether the company is actually offering a scholarship or is simply a scholarship search service. If the company claims to actually award a scholarship, be aware that most scholarship sponsors do not charge up-front fees to apply for funding, and no legitimate scholarship sponsor can guarantee that you will win an award. 2. Understand that scholarship search services do not award scholarships. These companies charge a fee to compare your profile with a database of scholarship opportunities and provide a list of awards for which you may qualify. They do not provide awards directly to applicants, nor do they help students apply for the awards. Some will list scholarships even if the application deadlines are past. 3. Don't give out credit card or bank account numbers on the phone or on the Internet without getting information in writing first. It may be a set-up for an unauthorized withdrawal. 4. The FTC reminds you not to forget the age-old rule: If it sounds too good to be true, it probably is! Reporting Scholarship Scams and Suspected Financial Aid Fraud If you feel that you have become a victim of a scholarship scam or financial aid fraud, please report it immediately to the:- U.S. Department of Education's Office of Inspector General (OIG): The OIG may be contacted using its hotline at 1-800-MIS-USED (1-800-647-8733) or at oig.hotline@ed.gov. Special agents in the OIG investigate fraud involving federal education dollars.
- Federal Trade Commission (FTC): The FTC has an online complaint form at www.ftc.gov/ and a hotline at 1-877-FTC-HELP (1-877-382-4357; teletype for the hearing impaired: 1-866-653-4261). The FTC will investigate based on the number of complaints received.
Fraud Alert
The US Department of Education (ED) released an alert regarding a recent scam. Per Kay Jacks, General Manager, "someone claiming to be a representative of ED is calling students, offering them grants, and asking for their bank account numbers so a processing fee can be charged. Specifically, the caller tells the student he understands the student has federal student loans and offers to replace the loans with an $8,000 grant. The caller explains that a processing fee must be charged and obtains the student?s checking account information.""There is not ED program to replace loans with grants and there is no processing fee to obtain Title IV grants from ED. Furthermore, students should never provide their bank account or credit card information over the phone unless they initiated the call and trust the company they are calling."
If you have been victimized by the scam, ED recommends you take the following steps: contact your bank, explain the situation, and request the bank monitor or close the compromised account; report the fraud to ED?s Office of Inspector General hotline at 1-800-MIS-USED (1-800-647-8733) or oig.hotline@ed.gov: report the fraud to the Federal Trade Commission (FTC). The (FTC) has an online complaint form at www.ftc.gov and a hotline at 1-877-FTC-HELP (1-877-382-4357); notify the police about the incident.
For information about identity theft prevention, visit www.ed.gov/misused.