Late night infomercials featuring that hyperactive guy wearing the funny question-mark print suit purport there's more than $890 million available in government grants--essentially "free money" to pay for your bills, expenses and debt payments. But be wary, gullible consumer, warns the Federal Trade Commission (FTC). Convincing you that there's an abundance of government grants for debt payments is one way con artists are taking advantage of cash-strapped individuals during an economic downturn. The truth about government grants for individuals is that eligibility is limited to those who use the monies to fulfill a public service set forth by U.S. law, such as academic and professional research.
About the Scam
Regardless if you hear about government grants to pay personal debt on the television, in print or on the Internet, these offers are inevitably scams, the FTC states. Scammers state that "free government money" can pay for education expenses, home repair and business expenses and even your unpaid debt. Scammers acquire banking information, purportedly so that the government grant can be deposited directly, or charge consumers an application "processing fee." The FTC notes that not only won't you see any government grant money; the scammers disappear with your money.
The Truth About Government Grants
The FTC notes there's never any need to pay anyone to get information about government grants--all of the information that you need is on the Internet, at www.grants.gov, which provides a list of grants available to organizations and individuals. Grants.gov, which is administered by the U.S. Department of Health and Human Services, states unequivocally that government grants cannot be pursued for purposes of personal expenditure. You cannot pay your debt with them or receive personal financial assistance for a similar purpose.
Who Government Grants Benefit
Government grants benefit the public, not the individual. According to grants.gov, most government grants go to groups and organizations. Examples of these include state and local governmental agencies, independent school districts, colleges and universities, non-profit organizations and small businesses. A limited number of individual grants are available, but these are typically for purposes of conducting research or providing a public service. For example, as of November 2009, the National Endowment for the Arts offered a grant for those who wished to pursue the translation of creative literature (novels, poetry and drama) from another language into English.
Closing Down Government Grant Scams
In July 2009, the FTC launched "Operation Short Change" to close down shop on con-artists who were defrauding the consumer public, including scammers offering bogus government grants for personal debt payment. "Rising unemployment, shrinking credit, record-setting foreclosures, and disappearing retirement accounts are causing consumers tremendous anxiety about making ends meet," stated David Vladeck, director of the FTC's Bureau of Consumer Protection. Scammers such as Grants For You Now, which operated numerous "free government money" websites and against which the FTC took legal action, provide an example of how con artists work. Consumers were charged $1.99 for grant information, charged a monthly membership program fee of almost $100, and $20 search fees through a third-party "Google Profit" program.
Who Can Help
There are no government grants for personal debt. Those in a financial bind may be eligible for public assistance and other services through the federal government or state services, notes Grants.gov. If you meet eligibility criteria based on your level of income and minimum personal assets, you may be able to receive such benefits as energy assistance, job training, child support, career counseling, Medicaid/Medicare, housing assistance or assistance to pay for food.
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