Posing as the government, sellers of bogus grant packages are blanketing New York and the nation with aggressive telemarketing calls, the state Consumer Protection Board said Tuesday at a press conference in Buffalo.
And even the skeptical can be taken in.
At first, "I didn't believe them; I hung up," Buffalo resident Vivian Norwood said. But a repeat call tricked her into thinking she was receiving a grant of $25,000 -- that's when she gave her checking account number.
"They told me the (fee) would be taken out of my grant," Norwood said. Instead, a $257 "processing fee" was deducted from her bank account.
So far, no $25,000.
Norwood spoke at a press conference with Consumer Protection Board Chair Teresa A. Santiago on Tuesday. The agency will help Norwood file papers at her bank disputing the electronic transaction, Santiago said.
The scam traces back to a Florida company called Consumer Grants USA, whose telemarketers use a number of official-sounding names to give the impression they're from a government agency, Santiago said. The company is under investigation by federal authorities, she said.
According to the Better Business Bureau national database, Consumer Grants USA faces legal action by the Ohio attorney general for violations of consumer protection law.
Calls to the company's phone numbers listed by the BBB went unanswered.
"This is a new twist on a very old scam that's been happening for years," said Ellen Tucker, special projects director for the Buffalo Better Business Bureau. Similar "prepayment" scams promise a loan, college grant or other benefit, in return for an up-front fee. The telemarketers may seek to skirt the law by recording their victims' authorization for payment.
Consumers should never give the number of their checking account to a caller, Tucker said. Authorizing a check over the phone should only be used when you place the call, and when the company is one that you know, such as a utility, she said.
One telemarketer's call was recorded by a Consumer Protection Board staffer. The caller posed as a representative of the federal government and said that a grant of $8,000 was guaranteed, "even if we feel it is not a very good purpose," according to the staffer's transcript.
Information about real government grants is available for free at public libraries and from agencies, Santiago said. However, there are no grants for individuals to pay their personal expenses or get out of debt, as the scammers promise.
"There is no 'free government money,' . . . no agency is going to call you at home and tell you they have money for you," Santiago said.
According to a Web site operated by Consumer Grants USA, www.gvtgrantsinfo.com, the company's materials are "100% guaranteed" and unsatisfied customers should e-mail for a refund. The company charges a fee for providing government grant information because, "We have spent thousands of hours and over $100,000 dollars researching and compiling this information into something useful that you can use."