Reghan Winkler: Avoiding Scams Disguised as Grants

Many individuals, families, small businesses, and nonprofits continue to struggle as America tries to get back on its feet. Skyrocketing inflation and gasoline prices, coupled with supply chain and labor issues, have made recovery difficult, leading to desperate attempts to stay afloat.

For many struggling business owners, a government grant seemed like the perfect solution to their problems. The best feature of a grant is that the funds are free. The organization, agency or institution giving the money does not require any reimbursement. This could be the ideal short-term solution to avoid the closure of their businesses.

As we said before, scammers never let a good crisis go to waste. The COVID-19 pandemic has seen an increase in scams aimed at taking advantage of people in dire financial straits. Reported scams targeting grants and people posing as representatives of government agencies peaked in 2021, but losses suffered by scammers still exceeded $445 million.

The government grant scam looks like this: the person receives a message through a phone call, email, or Facebook Messenger note from a friend or in a text message that says, “Attention small business owners. of your tax information, you are eligible for a free federal grant of $10,000 (or more). Claim your money by clicking here.

What’s better than free money from the government?

Two scenarios can occur if the business owner clicks the link:

1) They are asked to provide their company’s tax information and bank account number. A “confirmation” email then follows indicating that the funds would be deposited soon.

Fraudsters then have the necessary information to empty the company’s bank account and expose the company to tax complications.

2) They are encouraged to call an agency representative to assist them with the application process. The representative takes their financial information and then says that the business owner must pay a processing fee of a few hundred dollars to release the “grant” funds. Payment must be made with gift cards, bitcoin or CashApp.

We know a BBB office reported that a small business owner contacted them, claiming that they had over time sent scammers over $20,000 worth of iTunes gift cards to obtain a promised grant. .

Here are some things to know about government grants:

• The only official point of access for all federal granting agencies is

• Applications for government grants and information about them are free. Lists of grant-giving organizations are available free of charge at any public library or on the Internet.

• There are no fees associated with applying for a government grant.

• You will never be asked by the government to offer you a subsidy.

• All government grants involve an application process. Projects must have a public purpose and funds are not for personal use.

To protect yourself from grant scammers:

• Don’t pay for a “free” government grant. Pay no upfront fees. Federal agencies or employees will never ask people to wire or pay with a gift card, Bitcoin, or CashApp.

• Never give out your bank account information to anyone you don’t know, no matter how pressured you are to do so. Never provide information to anyone unless you are absolutely sure that the company or agency you are dealing with is legitimate and you know exactly why the information is needed.

• If you have already paid a scammer, act quickly! Scammers intentionally make it difficult to get your money back and chances are you won’t. You can try contacting the company used to send the money. Tell them the gift card, money transfer, or cryptocurrency company was a fraudulent transaction. Then ask them to reverse it. More information can be found at or call the BBB at (419)223-7010.

Reghan Winkler is executive director of the Better Business Bureau serving West Central Ohio. The BBB is available on the Internet at