Scholarship scams
To alert consumers to fraudulent, deceptive, and unfair
practices in the marketplace, the Federal
Trade Commission (FTC) offers guidelines and services to help you
avoid unscrupulous vendors of scholarship search products.
FTC advice on scholarships search
"seminars"
The FTC provides information to help consumers spot, stop,
and avoid scholarship scams. One of the scams that the FTC has warned
consumers about is the "financial aid" or "scholarship"
seminars. They suggest keeping the following in mind if you decide to
attend a seminar:
- Take your time. Don't be rushed into paying at
the seminar. Avoid high-pressure sales pitches that require you to
"buy now or risk losing out" on the opportunity. Solid opportunities
are not sold through nerve-racking tactics.
- Investigate the organization you're considering
paying for help. Talk to a guidance counselor or financial aid advisor
at the University before spending your money. You may be able to get
the same help for free.
- Be wary of "success stories" or testimonials
of extraordinary success. Instead, ask for a list of at least three
local families who have used the services in the last year. Ask each
if they are satisfied with the products and services received.
- Be cautious about purchasing from seminar representatives
who are reluctant to answer questions or who give evasive answers
to your questions. Legitimate business people are more than willing
to give you information about their services.
- Ask how much money is charged for the service, the
services that will be performed, and the company's refund policy.
Get this information in writing. Keep in mind that you may never recoup
the money you give to an unscrupulous operator, despite stated refund
policies.
BEWARE of false claims
FTC warns you to beware of companies that make any of
the following claims or information requests:
- "The scholarship is guaranteed or your money
back." No one can guarantee that they'll get you a grant
or scholarship. Refund guarantees often have conditions or strings
attached. Get refund policies in writing before you pay.
- "You can't get this information
anywhere else." There are many free lists of scholarships. Check
with your school or library before you decide to pay someone to do
the work for you.
- "May I have your credit card or bank number to
hold this scholarship?" Don't give out your credit card
or bank account number on the phone without getting information in
writing first. It may be a setup for an unauthorized withdrawal.
- "We'll do all the work." Don't
be fooled. There's no way around it. You must apply for scholarships
or grants yourself.
- "The scholarship will cost some money."
Don't pay anyone who claims to be holding a scholarship or grant
for you. Free money shouldn't cost a thing.
- "You've been selected by a national foundation
to receive a scholarship" or, "You are a finalist" in a contest you have not entered. Before you send money to apply
for a scholarship, make sure the foundation or program is legitimate.
The Federal Trade Commission has a toll-free phone number
at 1-877-382-4357 and an online complaint
form.
