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Scholarship Scams

In my career as an education-focused professional I have come across generic articles about scholarship scam artists that try to defraud consumers (students and parents). Upon further review, what I have found in FTC (Federal Trade Commission) reports are that in addition to the consumer-focused scam artists, students who commit fraud by trying to manipulate financial aid or scholarships are being prosecuted. This is a little known or perhaps little discussed part of the scholarship equation. I have actually had a student in a recent boot camp who asked me repeatedly about lying on applications - not a good idea, obviously.

Here is some good information:

Special excerpt from the book Scholarships 101: The Real-World Guide to Getting Cash for College

Copyright 2008 by Kim Stezala. No reproduction without prior written consent.

Scammers, creeps, and thugs.

Okay, enough name calling. In the scholarship profession, the deceitful people who prey upon scholarship-seeking students and their families are called scholarship scam artists. I added the new labels “creeps and thugs” because that’s what they really are. Their sole purpose is to prey upon confused students and parents. Period. According to the Federal Trade Commission, in 2004, about one percent of fraud complaints were related to scholarship scam artists. That doesn’t sound like a lot, unless you were one of the victims. Use your street smarts to avoid these folks who may operate online, in-person, via email or snail mail. Read the tips below, derived from the Federal Trade Commission. Just like comic book villains, the scammers can shift form to elude the good guys, so stay alert!

Scholarship scam artists are the evil side of the scholarship industry. These folks lurk online or in hidden offices spewing their phony offers to unsuspecting students. Examples of suspicious behavior include:
 

§ Sending you “award announcements” for contests you never entered.

§ Claiming “guaranteed results” to bring you scholarship money.

§ Forcing you to pay “upfront fees” for generic scholarship lists.

§ Using language that sounds like they are government representatives.

§ Promising to deliver “secret scholarships” that no one else knows about.

 

It’s all bogus.

Another group of scammers are people who pretend to operate their own scholarship programs just to gain your personal information. With identity theft on the rise, be very careful.

I uncovered one of these folks while doing research for a local scholarship database. A guidance counselor called me to ask if I had ever heard of this particular scholarship. The application had a post office box, but it had no phone number, no website, no email and it requested students’ social security number, mother’s maiden name, and peculiar information about the applicants’ childhood. Unofficially, it had a high “stink factor” compared to the many high-quality, legitimate scholarships out there. Officially, my staff could not verify the scholarship, or the supposed founder, and we refused to post it to our website. Use your intuition but also ask for an opinion at your school office or college’s financial aid office if you suspect a scammer. The good news is that the overwhelming majority of individuals who work in the scholarship business are caring professionals that really want to help you.

To check out scholarship scam alerts go directly to the Federal Trade Commission website at www.ftc.gov.

Scam alerts and fraud (from the Federal Trade Commission and NACAC - National Association of College Admissions Counselors)

The best list of articles about scholarship and financial aid scams can be found at NACAC’s website: http://www.nacacnet.org/MemberPortal/ForStudents/ScholarshipScams/


A short list of people and companies accused in the last decade of scholarship scamming, shared by the FTC. If you look closely you will see that they operated mail or telemarketing based scams - I wonder what this would look like if it reflected internet-based scams. http://www.ftc.gov/bcp/conline/edcams/scholarship/cases.shtm


The most recent annual report from the FTC on scholarship fraud (May 2008) is linked below. For scholarship geeks like me who actually read the fine print, you will notice that students, not just traditional scam artists, are accused and convicted of fraud. http://www.ftc.gov/opa/2008/05/scholarfraud.shtm

 

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© 2012 Kimberly Stezala, Stezala Consulting, LLC. All Rights Reserved. Last Updated 02/10/2012 10:09 AM