Recognizing the Scammer - How can you tell the good from the bad?

A Scammer:

• Says you’ve "won an award" for which you did not apply.

• Does not supply valid contact information.

• Guarantees you "will win an award."

• Requires personal financial information (such as credit card number or checking account numbers) to “verify” or “hold” a scholarship.

A Legitimate Scholarship Service:

• Sends information about awards when you request it.

• Makes contact information available upon request.

• Does not guarantee you will win an award.

• Should not direct you to a fee-based provider because they know that financial aid information is readily available for free.

Popular (But False) Claims:

• “For a small fee we’ll give you a list of scholarships.” Never spend money on a fee-based matching service. The biggest and best award databases are available for free on the Internet, including FastWeb: www.fastweb.com.

•  “$6.6 billion in scholarships went unclaimed last year.” Statements about unclaimed awards are misleading. They generally refer to tuition reimbursements that aren’t available to the public. Scholarships are competitive and are awarded.

• “You are guaranteed a minimum of $1,000 in awards.” A service can’t guarantee any scholarships because they have no control over the scholarship judge’s decisions.

• “We’ll need a bank account/credit card number to verify your information.” To win a legitimate scholarship, you must submit your own applications, write your own essays and solicit your own letters of recommendation. There is no way to avoid doing the work.

Consultants:

• Paying a fee to a financial aid service to help you apply for aid may be an unnecessary expense. Here's why:

  • Claim: "We'll help you complete complicated forms."
    Reality: You still have to fill out the same basic information for a fee-based service that you would for the FAFSA; how else would they get your information?

  • Claim: "We'll find different ways to report your assets and obtain more aid."
    Reality: A. This information is available for free at FinAid;

    2. While these services can be legitimate, remember that colleges can request additional documentation about your finances;

    3. Not reporting information accurately is against the law (punishable up to a $20,00 fine, prison or both).

Seminars:

• You may be able to do what they do on your own.

  • Claim: "Our presentation is completely free."
    Reality: While the presentation is free, they may use high-pressure tactics to try to get you signed up for their service. They may also claim that the price will increase if you don't sign up now, or that they can answer questions after payment.

  • Claim: "We can help you complete complicated forms."
    Reality: Everyone needs to complete the same basic information to complete financial aid forms. So even if you pay for help, it is still up to you to do the work of assembling the information. Help with the FAFSA is available for free HERE or by phone at 1-800-4-FED-AID.

  • Claim: "We'll find loopholes to help you save money."
    Reality: The company may be encouraging you to commit fraud by entering inaccurate information to make it seem like you earn less money. These practices are dishonest and illegal!

Protect yourself:

• Talk to your guidance counselor. They can tell you if they've had trouble with any consultant in particular.

• If you use a consultant, consider qualifications carefully. Find a consultant who has worked as a financial aid administrator, CPA or CFP.

• Don't let anyone take a percentage of your aid as a fee. The aid you win is yours and should not be shared.

• Never use anyone who encourages you to do something unethical. If you falsify financial aid forms you can end up paying a big fine, going to jail or both.

• Because it's held at a local school does not mean a seminar is legitimate. Be sure to check with your school or counselor if you think the seminar might be a scam.

Found a scam? Been scammed?

If credit cards or bank accounts have been compromised, what should you do?

• Immediately contact your bank. Explain the situation and have the bank close your account(s).

• Report the fraud to the Federal Trade Commission (FTC)

  • www.ftc.gov/scholarshipscams

  • Phone: 877-FTC-HELP (1-877-382-4357)

• Save all forms you receive from the suspect company.

• Keep copies of written details about the offer and any correspondence, emails, or other paperwork.

• Make sure all materials are dated.

• Take notes during any seminar or phone conversations.

• Record the date, time, phone number and the person’s name with whom you spoke. Also, include a detailed a account of your conversation.

• Beside the FTC, you can also notify these other agencies:

  • National Fraud Information Center (NFIC)  www.fraud.org Phone: 800-876-7060

  • State Attorney General’s Office - Call information or visit your state’s Web site to obtain state attorney general’s contact information. Ask them about filing a complaint with the Bureau of Consumer Protection in your state.

  • Better Business Bureau (BBB) www.bbb.org Phone: 703-276-0100

  • United States Postal Inspection Service (USPIS www.usps.gov/postalinspectors/fraud Phone: 800-654-8896