Take for granted? FTC challenges claims for “grants”

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Here are some truths about Grants.

Ulysses was the 18th president.
Cary was a suave star of the silver screen.
Former NBA great Horace wore the coolest goggles in the game.

And according to an FTC lawsuit against a Phoenix-based operation, people should be suspicious of anyone who calls out of the blue and claims to be offering grants to pay off their debts, fix their homes, or help with medical bills. If you’re a prospective home-based entrepreneur, read on because the FTC says that’s not all the defendants are up to.

The complaint alleges that Blue Saguaro Marketing, Marketing Ways.com, Max Results Marketing, and others operate call centers that contact consumers – often veterans, older Americans, or people in debt – with promises of grants from the government or corporations. Supposedly to determine the amount of the grant, the telemarketers ask consumers for their income, driver’s license number, home value, credit card debt, available credit, access to savings and retirement funds, and other sensitive information.

According to the FTC, the next step in the song-and-dance is a request that people pay cash up front, money the defendants claim will be refunded when consumers get their much larger “grants.” The complaint alleges the defendants then set some people up for reloading, the practice of inflicting a second whammy on already-deceived consumers. The defendants allegedly promise to help them establish a limited liability company (LLC) to qualify for even bigger grants available only to businesses. But as it turns out, there aren’t any grants. And according to the lawsuit, there aren’t any refunds either.

Prospective business owners are another audience the defendants target. In numerous instances, telemarketers pitch a home-based business opportunity, claiming to be from Amazon or affiliated with the online retailer. For upfront fees ranging from several hundred to several thousand dollars, they say they’ll create websites for would-be entrepreneurs that link to Amazon.com, advertise those sites, and use search engine optimization to drive shoppers there. The owner can sit back and earn thousands in commissions based on Amazon purchases made through the site.

The truth, however, is that the callers aren’t affiliated with Amazon, the websites either don’t function or are pretty much the same as sites sold to other buyers, and people don’t make the big bucks the defendants promised.

The lawsuit alleges multiple violations of the FTC Act and the Telemarketing Sales Rule. At the FTC’s request, a federal court has temporarily halted the operation. The FTC wants to end the allegedly illegal practices altogether and seeks refunds for consumers.

As a business person, your employees, friends, and family look to you for advice about how the business world really works. Help protect them from potential rip-offs by sharing these tips.

  1. Government agencies and corporations don’t just randomly call people to offer free money. Legitimate programs – veterans’ benefits, for example – have a formal application process and never require cash up front. If someone calls pitching what sounds like a grant, we suggest this one-word response: buh-bye.
  2. If you place a call to a company to, say, order a product, it’s understandable they may need your address, credit card, or account number. But if someone calls you and asks for personal information, odds are they’re up to no good. Let questions like that serve as a warning to get off the phone.
  3. Achieving financial security by owning your own business? Unscrupulous pitch people try to turn that American Dream into an American Scheme. Ask the successful entrepreneurs you know how they got started and we bet the answer isn’t “I sent money to someone who cold-called me.” Before investing in any business opportunity, form your own informal Advisory Board and seek out the wisdom of people you trust – people unaffiliated with the bizopp, of course.

Check out resources on the FTC’s Going into Business page.

 

Comments

Unfortunately, I stupidly allowed myself to be sucked into this scam. Can the government do ANY thing to possibly get back all or part of our money. I personally am out $4,500 and have not heard from them since they were paid - of course with the promise of getting all of it back when I get the grant. I am 69, retired, and a widow. I can't believe I fell for this.

They were so believable it makes me sick to think I fell for it. At 75 I should have known better and they took us for almost $10,000. Only pray we get some of it back.

They told me that I would lose 250 I gave them already if I don't give them the 100 more and they gave me every excuse not to refund my 250 I have been scam the amount they said it was 14666 that a lot to a single mother

I am 73 years old, a widow, retired. I sent this person 1,500 dollars.
She said I would get a grant for 275,000.
she listed she worked for the Federal goverment.. I cant believe i felt for this, is there anyway I can recover any of the money

If you send money by money transfer, like MoneyGram or Western Union, it's like sending cash. You can't get it back.  You could report the problem to the company; call the Western Union Fraud Hotline at 800-448-1492 or the MoneyGram Customer Care Center at 1‑800‑926‑9400.

If you used your credit card, you could contact your credit card company and explain what happened.

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