Government and foundation grants are hard to get and come with many strings attached. Still, each year thousands of consumers are victimized by fast-talking scam artists who convince them they can get "free" money, just by paying a small "registration" fee.
A Raleigh, North Carolina company marketing easy-to-get but non-existent grants has been shut down by the state's attorney general.
"Outfits like this use the lure of free grants to try to take your money," said North Carolina Attorney General Roy Cooper. "This company took money from dozens of people but didn't win a single grant. Now they won't be taking money from anyone else, period."
A North Carolina judge has entered a default judgment against Aron Andrew Willis and his company, Grant Quest, Inc., of Raleigh. Willis and anyone else associated with Grant Quest are permanently banned from operating or working in a business that claims to help people win grants or other financial assistance. The court also ordered the defendants to pay $40,000 in refunds and civil penalties.
Cooper filed suit against Grant Quest and Willis in 2005 charging that they deceived North Carolina consumers into paying an upfront fee and then failed to help them secure cash grants as promised.
As alleged in Cooper's complaint, Grant Quest began placing advertisements in North Carolina newspapers in March of 2004 that claimed, "Cash grants available immediately!" The ads stated that as much as 30 million dollars in grants from private foundations and the government was available and that Grant Quest would show customers "exactly how and where" to win grants that did not have to be paid back.
At least 69 people responded to the ads. Cooper says these consumers each paid Grant Quest $139 for help but Grant Quest and Willis failed to win grants for any of their customers. Some people received nothing in exchange for their payment, while others got some sketchy information downloaded from the Internet about how to apply for grants and loans.
Despite offers of a full refund in the company's ads, Grant Quest allegedly refused to pay refunds when asked.
Grant scams are on the rise as credit becomes harder for many consumers to get, Cooper said. Many of these schemes make their pitch via the Internet or through telemarketing calls. The scams operate by taking money upfront and then fail to provide any grants.
"Offers of easy money can be tempting, especially when families are struggling to make ends meet," said Cooper. "No matter how good the deal sounds, don't waste any of your money on these empty promises."