Scholarships offer great opportunities for students who face economic hardships. Every year, several deserving students realize their college dream with such financial aid programs. Since so many students and parents are looking for potential financial aid prospects, they have also become soft targets for scammers.
Scholarship scammers generally use high-pressure sales tactics to lure people into their traps. One of the most common signs of a scholarship scam is asking to pay money to receive financial aid. If you come across an entity that asks you to submit a certain amount to be eligible for a scholarship, you should stay away from it.
But sometimes, scammers disguise their intentions so well that it becomes difficult to identify whether they're authentic or bogus.
That's why we've come up with this guide, which will help you spot the key identifiers of scholarship scams. We'll also be sharing a few tips on how you can safeguard yourself from falling prey to such mishaps.
There are several common signs that you can quickly identify in "too good to be true" scholarships. Here are a few obvious ones to look out for:
Asking For A Fee
Most legitimate scholarships do not charge a fee to accept the financial aid or be eligible for it. However, fake scholarship offering entities might try to compel you into paying something.
The price may be nominal and reasonable, such as application charges, processing, and handling fees, or they may ask for an amount before disbursement of financial aid.
In one of the common scenarios encountered, the sponsor sent a check for the scholarship but required the student or parents to send back a check for some fees. You need to remember there is no such thing as fees in an authentic scholarship. Such student scholarships and financial aids never materialize.
Asking for unusual credentials
Stay away from scholarships that ask for information like credit card numbers, bank account numbers, or social security credentials. It just doesn't make sense as no authentic scholarship should ask for such details to verify your identity or specify this as relevant information in their application forms.
Scammers usually use such personal information in concurrence with the date of birth, your parent's name, and other information to commit identity theft and apply for new credit cards in your name.
They may also use the numbers on the bottom of your checks to withdraw the amount from your bank account using demand drafts.
Claims to be approved by a reputable organization
Some scammers claim to be affiliated with reputable organizations, like the U.S Department of Education, to develop trust among the audience. While it may sound appealing, you should know that the federal government isn't allowed to endorse private organizations. Such claims are usually false and only mean harm.
If you attended a financial aid seminar in college or any other educational institute, don't assume the authenticity of such sales pitches as your school or college seldom endorses these. Get in touch with your administration to find if they are institution-approved or mere sponsored events.
A common scholarship scam is where the scammers tell you that you've won a scholarship worth a million bucks, but you must pay taxes for the money gained in advance. Most people fall for such schemes and realize that they got scammed when it is too late.
You need first to address the fact that you never applied to such a scholarship. Secondly, weigh in the chances of being a scam as no scholarship will ask to pay an amount in advance.
Firms that offer guaranteed results
There might be companies that claim to possess exceptional services and can provide you guaranteed outcomes. They will promise a full refund if you receive any benefit from their program. You need to understand that there is no such thing as a guarantee when it comes to scholarships.
These companies will pocket your money and disappear. They may also claim that they will do all the heavy lifting, and you just have to provide some necessary information. It may sound enticing, but such schemes are scams. It's just not possible to compile such data to benefit from directly.
Ultimately you will have to work hard to secure a scholarship that works for you. If you want to benefit from financial aid, you will have to work like the other competing candidates.
Promises of unclaimed scholarships
The myth of unclaimed scholarships has been around for decades now. Some companies claim to offer exclusive services and access to unclaimed sources. Most authentic awards receive an overwhelming number of applications, and the chances of being unclaimed are almost negligible.
Claims of being a nonprofit organization or a charitable trust
Never make assumptions from the company's name that they have charitable purposes. Most such organizations are frauds and have been using such misleading business names illegally. For instance, if an organization has 'Fund,' 'Foundation,' or 'Trust' in their business name, chances are it is not a charitable association in the first place.
Typing and spelling Errors
Scholarship application materials that contain spelling and grammatical errors or lack a professional appearance are probably a scam.
5 Ways To Protect Yourself From Scholarship Scams
Making yourself aware of possible scholarship scams is the key here. If you are financially vulnerable and on the lookout for money for a college education, you will most probably fall prey to these scammers. Educating yourself about the possibility of a scam is the first step.
You need to scrutinize everything when it comes to identifying legitimate sources meticulously. Other than that, follow the below-mentioned guidelines when analyzing possible prospects:
Never give out personal information
Giving out personal information like banking details, social security numbers, and credit card credentials to strangers over the phone is never a good idea. No matter how reasonable a person may sound, you should refrain from doing so.
Trust written communication over verbal promises
There may be chances that most fraudulent communications are verbal or over the phone. You must only trust written communication with verifiable facts. It's always a good idea to get offers, refund policies, scholarship terms, and conditions, or any other guarantees in writing before trusting the source. Once you have all the information you need, verify the data for authenticity.
Verify organization's source of information
Most organizations that approach you for scholarships will notify a reputable source as the basis for your credentials. Always ask and verify their origin; for example, they might suggest that the College Board's database had your information.
You need to be wary of such approaches as college boards only release the information to colleges and other educational institutes. Most probably, these scammers got your data from a coded script that mines data on the Internet. They might feed you this information when they approach you through phone or email.
Ignore immediate response requests
Many scammers may ask for an immediate response from you. Such calls get often highlighted with a sense of urgency, and things are left hanging by a thread.
They may ask you to seize the opportunity with quick action like transferring a nominal amount, register on their portal, or give out personal information. Your immediate response in such a case should be ignoring the call.
Maintain records of all communication
Once you are approached with such calls, maintaining each telephonic conversation and correspondence is a great idea that can save many other students. If you feel that this might be a scam, these records will help the law do its work at any point in time.
Report such scholarship scams to protect others
Most scholarship and financial aid scams violate federal laws and are punishable by the penal court. If you ever encounter such a fraud, getting a second opinion should be your priority.
You can approach a guidance counselor or the financial aid office of your schools with your concern. They can provide a better understanding of the legitimacy of the scholarship. It is advisable to bring a copy of all correspondence and communication specific to the suspected scam when you file the complaint.
Once confirmed of the suspicion, you can report the incident summarizing the events to anti-fraud agencies like National Fraud Information Center (NFIC), Federal Trade Commission (FTC), and Better Business Bureau (BBB).
Be sure to include all information with your claims. Provide as much information as possible, including names, phone numbers, email addresses, copies of written communication, and letters.
You can also include the notes you might have taken during the telephonic conversations with the date and time, including the credentials of the person you spoke to. Being as thorough as possible with the complaint is critical here.
While most scholarships out there are legitimate; you need to be wary of the fraudulent ones. If you get approached for money, credit card details, social security numbers, or bank details, we suggest refraining from providing such information until you trust the source. If you ignore such red flags, you will probably lose your money and maybe open the door for credit card fraud or identity theft.
If you are ever approached with "too good to be true" schemes, maintain proper records and track all communication. Once you have substantial information, report such findings to appropriate authorities.
This way, you can save several others from falling prey to scams. The more aware we are, the lesser the chances we pose to these scammers of taking advantage of vulnerable, innocent individuals.