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Every year 350,000 families are cheated out of five million dollars of their hard earned cash from those posing as scholarship search firms. They also operate as scholarship sponsors but are in fact scholarship scams.

How Do Scholarship Scams Work?  

These fraudulent businesses start weaving their web of deceit by sending a letter to high school or college students. The sales letters lay claim to the fact that they can get you scholarships or a list of scholarships. List for scholarships are free at the local public library why pay for a list?

They have a toll free telephone number to try and add to there legitimize. But credibility falls apart quickly as they use high-pressure telemarketers to sell you an “unclaimed scholarship” for a fee of $40-$400 per scholarship.

Ruthless dead-beat scammers usually guarantee a $1,000 scholarship, which is bogus. Unclaimed scholarships go back in a pot for others (which has never left anyway) that have applied directly to the scholarship sponsor (school, corporation or association), which will be familiar such as Merit Scholars.org.

Sometimes when customers request a refund they promise to make the guarantee good by asking for a bank account number or credit card number, which they intend to empty or run up as soon as possible.

How to Avoid Scholarship Scams.

1. Make sure to ask for an address (not PO Box) and check it out. Also a phone number but usually they will give you a cell number that is temporary.
2. Get their name and Google it to see if they are listed anywhere.
3. Find out if the local Better Business Bureau has a file on this business.
4. Never give someone a bank account number or credit card before you get the information.
5. Ask for references in you hometown.
6. Call the state attorney’s office. 

Warning Signs for Scholarship Scams

The FTC warns students and parents to be on the lookout for the seven signs of a scam.

1. The scammer says, “This is an exclusive offer available nowhere else.”
2. The scammer says, “They need your credit card, bank account, and Paypal account in advance of receiving the scholarship.” Never give financial information to anyone before you check him or her out.
3. The scammer says, “The scholarship will cost a fee.” Legitimate scholarships never charge a fee.
4. The scammer says, “The scholarship is guaranteed or your money back.” No scholarships are guaranteed.
5. The scammer says, “The scholarship service will do all the work.” They must be hiding something if you never talk or correspond with the scholarship sponsor.
6. If the scammer or their sales letter starts by saying, “You are a finalist” in a contest you never entered or my favorite is “You have been selected by a national foundation to receive a scholarship” then you can bet it is a scam. Both of these come-ons are used frequently to dub the public constantly.
7. If the scammer invites you to a seminar or an interview to “unlock the secrets of how to make yourself eligible for more financial aid” do not go. You can’t make yourself more eligible because either you are or are not. 

Hope this helps everyone avoid financial disaster at the hands of the world’s scammers.

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