Consumer Corner: Did I Really Get A Grant?

Provided by the Bucks County Department of Consumer Protection:

Q. Just after the holidays ended, I received a call from the “Federal Grants Administration” informing me that my “grant application” has been approved for $5,000. I don’t remember applying for a grant, however, I am still in the process of paying back student loans and had depleted my savings buying gifts for the holidays. I thought to myself that this grant could not have come at a better time! However, my excitement quickly disappeared when the caller went on to tell me that, in order for them to send me this grant money, I would have to pay a $250 processing fee in the form of a “green dot credit card” which I can purchase at my local CVS store. At that point I declined the offer and hung up. First of all I have no idea what type of card he was talking about. What is a “green dot credit card” ? Secondly, I’ve never had to pay a fee to get a school grant. Is this a scam? – N.D., Buckingham

A. A green dot credit card is from the Green Dot Corporation, an issuer of prepaid MasterCard and Visa cards in the United States. These products are available at more than 60,000 retail stores. Green Dot can also transfers individual’s direct deposit funds (such as Social Security payments) from the US government to personal bank accounts.

The cards may be used like normal debit or credit cards, but they are not backed by a checking account or line of credit. Purchases are deducted from the balance stored on the card. The user can add more money to the card by paying cash at a retail store’s point of sale.

The call that you received was indeed a scam. A legitimate government agency will not ask you to pay a processing fee for a grant that you have been awarded. You had good instincts in hanging up when you did. For future use, the names of agencies and foundations that award grants are available at no cost at any public library or on the Internet. The only official access point for all federal grant-making agencies is www.grants.gov.

For additional tips and brochures on many consumers related issues please visit us at http://www.buckscounty.org/government/CommunityServices/ConsumerProtection/ConsumerTips