Watch out for the 'government grant' scam

Woman paid $250 to be eligible, but it was fake

If money is tight this holiday season, you'll listen to almost anyone who says they can help you find a bit more cash.

And who wouldn't want a little extra money from the government to help  with Christmas?

One woman's touching story is a lesson to everyone.

Thought her prayers were answered

Renay Smith struggles to pay the rent, with her earnings from a food packing company, so Facebook postings about government grants gave her hope.

She thought her prayers were answered when she got an unexpected phone call from Washington.

"They said they picked my phone number, and they said I won a federal grant. It was a once-in-a-lifetime opportunity."

The caller said she qualified for a $9,000 federal grant for paying her taxes on time.

To collect it, she said, "I had to buy $250 in iTunes gift cards for fees. They wanted me to read the numbers off of them over the phone."

But after buying $250 worth of cards, Smith said, "He was like, now you have to pay $400 to taxes. And I stated crying and said I don't have any more money. I don't have it. And now I'm about to be homeless!"

Who was calling?

We attempted to reach the person who called her, by calling the number that she had been communicating with.

But it was disconnected. A computerized voice only said "Welcome to Verizon Wireless. Your call cannot be completed as dialed."

It appears the scammer had been using a disposable cell phone number, and after getting Smith's $250 (and who knows how much money from other victims), he simply canceled the number and moved on.

The Federal Trade Commission says this is the classic grant scam. Beware:

  • Real Federal grants require a lengthy application process
  • The government will never ask for a fee sent via Western Union or an iTunes gift card

If someone tells you to go to Walmart (or a supermarket) and purchase gift cards, then read them the number off the back, it's a scam and you are about to lose every dollar you just spent. You cannot retrieve money from iTunes gift cards once it has been forwarded to someone else.

As for the phone number from "Washington," the number was from Washington State, not Washington, DC. But it sure was convincing to anyone thinking the government was calling to offer a grant.

"They just took my money, and they didn't care," Smith said.

You may realize this is a scam.  But many people do not.

Let your older relatives and just-graduating children know the government is not handing out grants.

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