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How to avoid scholarship scams

Never pay for free aid.

Not all scholarship programs are legit — some are only designed to take your money or steal your identity. But you can often avoid falling victim by following your instincts and educating yourself.

3 tips to avoid scholarship scams

Follow these three general guidelines to help you steer clear of illegitimate scholarship programs.

Protect your information

You generally don’t need to provide anything other than your birthday and ZIP code when you’re looking for a scholarship. Companies that ask for your email could sell the address to third parties, filling your inbox with spam. In the worst case scenario, you could get your identity stolen.

Don’t pay to find a scholarship

With plenty of free resources to find scholarships – including your high school guidance counselor — there’s no reason to pay money to get connected with scholarships. Even if a paid resource isn’t a scam, you’ll still be spending money when you don’t need to.

Trust your instincts

If something seems fishy, stay away. There are plenty of legit resources out there that don’t sound like a scam. It’s best to not take the risk.

9 telltale signs of a scholarship scam

Look out for these red flags when searching for scholarships:

  • Sensitive information required. Companies that ask for your Social Security number, passport number or driver’s license could be phishing for information. You could become a victim of identity theft.
  • Bank account number required. Be cautious of scholarships that ask for your checking account number to confirm your eligibility or ask you to pay a monthly or weekly fee. These companies might take money from your account without your consent or for an indefinite period of time.
  • Asks for money up front. You should never have to pay money up front when you apply for a scholarship.
  • Money-back guarantee. While some legit companies might help you find a scholarship for a fee, they’ll never guarantee you’ll get approved. These companies are being dishonest.
  • Unsolicited scholarship offers. Emails congratulating you on being selected as a finalist for a scholarship you never applied for are usually too good to be true.
  • Promises to make you eligible. No company can guarantee you’ll qualify for certain scholarship or grant programs, especially those run by the Department of Education.
  • Spelling and grammar errors. One or two misplaced commas probably doesn’t spell a scam. But if there are glaring errors in prominent places, chances are it’s not a legit operation.
  • Exaggerated success stories. Companies that boast stories from past customers that are hard to believe could be an indication that they’re being dishonest.

What can I do if I’ve been scammed?

There are several steps you can take if you think you’ve been a victim of a scholarship scam:

  • File a complaint with the FTC. The Federal Trade Commission (FTC) handles scam complaints on a national level. You can file a complaint on the FTC website or over the phone. It’ll share that information with federal and local law enforcement agencies to help them investigate the company.
  • File a complaint with your state’s attorney general. Your state’s attorney general’s office also accepts complaints about scammers and may be able to take legal action against the company.
  • Participate in a lawsuit. If neither of the other options offered a resolution you’re satisfied with, you might want to consider hiring a lawyer. You can find legit representation through organizations like the National Association of Consumer Advocates (NACA).

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Bottom line

Knowing the red flags and following common sense can help you stay away from most scholarship scams. And if you think you might have been the victim of one, there are several resources you can turn to for help.

To avoid problems in the future, check out our guide to finding a scholarship for legit, free resources to get you started on your search.

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