Scam Warning on Government Grants

The Australian Competition and Consumer Commission (ACCC) is warning charities, small businesses  and individuals of the re-emergence of a scam offering money in the form of government grants.

The so-called “reclaim scams” try to convince organisations or individuals that they are entitled to a rebate or reimbursement from government, a bank or trusted organisation.

A philanthropic foundation alerted Pro Bono News to the re-emergence of the scam saying: “We received a call from an applicant who said [a website] charged her a $497 fee to link her to government, and it seems philanthropic, grant opportunities.”

ACCC deputy chair Delia Rickard said: “Scamwatch is warning Australian consumers and small businesses to take extra care when seeking government grants and to be suspicious of unsolicited offers of money in the form of government grants.

“The bottom line is that information relating to government grants is generally available free of charge from a variety of state and federal resources online.

“These types of scams are the fourth most common in Australia.”

In July 2016 the ACCC issued its first warning on reclaim scams through its Scamwatch site.

“If you are looking for grants to support or start a business be cautious of websites offering access to databases of government grants for a fee. These websites often give the impression they have government affiliation by using prominently-placed official logos, links to genuine government websites and photos of well-known Australians or landmarks,” the ACCC said.

“However, the fees charged by such sites are unnecessary because this information is made available for free on government websites.

“Reports to Scamwatch also indicate that even if you pay the fee, you may find that there is no grant available.”

ACCC figures for the first two months of 2017 showed that more than $24,000 was lost by consumers in reclaim scams, with the watchdog receiving almost 2,000 complaints.

In 2016 the ACCC received more than 13,000 reclaim scam complaints placing it in fourth place in the top 10 scam categories. July 2016 recorded the highest monthly financial loss to consumers from these scams at $125,704.

The ACCC said consumers and organisations also needed to be cautious of phone calls claiming they were entitled to a grant in return for an upfront fee.

“Scammers may claim to be from a fake government department and offer thousands of dollars because of a recent change to government policy,” the consumer watchdog said.

“Sometimes the scammers have already obtained a few of your personal details such as name and address which they will use during the call to make it seem legitimate. However, to claim the money you must first pay an ‘administration’ fee usually via wire transfer. If you pay, the scammers will make up excuses for why you need to send more.”

Legitimate information about government grants can be obtained for free here and other websites ending with .gov.au.

Report scams to the ACCC via the report a scam page.