23 Warning Signs of Scholarship Scams

Scholarship Scam Tips

Scholarship scams are much to common on the internet. Many students applying for scholarships get ripped off every year by fake scholarships. Using these twenty-three tips, however, attentive scholars should be able to avoid losing money.

1. No Telephone Number – One common characteristic of scholarship scams is the lack of phone numbers. While they may have a email, scams rarely include a phone number – it is much too easily traced.
2. No Proof of Past Winners – If there is not record of anyone having ever won the scholarship, the “scholarship” may be a scam. However, this is not always the case. New scholarships, obviously, have not had prior winners. Therefore, do not ignore a scholarship based on this alone, but if you see other warning signs in addition to this – be cautious.
3. Claim of Influence with Sponsors – This trick is often used by scholarship search scams. No scholarship search has ever been know to have influence with scholarship sponsors. If, in some strange circumstance, they really do have influence, then most likely the scholarship they have influence with is another scam run by one of their friends. Avoid scholarship searches that claim influence with sponsors.
4. Application Fees – Some scholarship scams make money by charging an “application fee”. Never participate in a scholarship that charges a fee to apply. Most of these scams charge $10 – $20, but some charge as low as $2 or as high as $5,000. They might try to convince you that they charge so that they only get serious applicants. Do not believe them. Stay away from any scholarships that require money to get money.
5. Notification by Phone – True scholarships normally notify the winners by mail. If, therefore, you get a call telling you that you have “won” a scholarship, be very careful. Ask them for their name and number and tell them that you will call back. Next, visit the scholarship’s official website and contact the sponsors. Ask them to verify that the name and phone number of the person who called you are those of one of their representatives. If the caller was legitimate, call them back. Using this method should stop scammers from getting your personal information.
6. Exceptional Endorsement Claims – Beware of false endorsement claims. If a scholarship claims to be sponsored by the Better Business Bureau or some specific college or university, investigate their claims. Call the organization and ask if they really did endorse the scholarship fund. If a scholarship claims to be sponsored by a government group, be even more wary. The US Department of Education, US Chamber of Commerce, and the federal government do not endorse any private organizations.
7. Abusive Treatment – If the supposed scholarship sponsor becomes angry or abusive when you ask questions, the scholarship is probably a scam. Be very wary.
8. “First Come, First Served” – In order to get people to apply quickly and without time to consider, some scholarship scams say that the scholarships are given on a rolling basis. Few, if any, legitimate scholarships give preference to the first applicants. Take time to investigate all questionable scholarships before applying.
9. “Guaranteed to Win” – This normally applies to scholarship searches. If a payed scholarship search guarantees that you will win, start looking for the fine print. Either, one, the company is a scam, or two there is a whole lot of fine print. Two scholarship searches that I recommend are Fast Web (My favorite) and College Board.
10. A Florida or California Address - For some reason, Florida and California addresses are seen by the public as more legitimate. Therefore, many scholarship scams use Florida or California addresses. Of course, some scholarship scams have other addresses, and some true scholarships do have Florida or California addresses.
11. Newly-formed Companies – True scholarships have normally been around for many years. If a company is new, it could easily be a scam. Therefore, you should ask all “new” companies for references.
12. Requests for Personal Financial Information – Some scholarship scams try to get personal information from applicants. If they get certain information from you such as your name, your date-of-birth, and your credit card, bank account , or social security number, the scholarship scammers can commit identity theft. Therefore, if anyone asks for personal financial information, hang up immediately.
13. Fake Federal Agencies – Just because an organization has an official sounding name or a Washington, D.C. address does not mean that it is a government agency. Many scholarship scams try to look like federal organizations in order to gain their victim’s trust. Beware!
14. “We Apply For You” – The trick in this is obvious. How can a company fill out a scholarship application for you? They cannot write your essay; they cannot gather your letters of recommendation; they cannot even fill out your name and address unless you have given that information to them! Always avoid websites that promise to apply for scholarships for you.
15. You “Win” a Scholarship that You Never Entered –  Some scholarship scams will contact random college students and tell the that they “won” a scholarship. Often, the scammer will then tell the student that he must pay a fee or give his credit card number before the prize money can be sent. If you are told that you “won” a scholarship that you do not remember entering, research that scholarship before giving any information. If you are told that you must pay money to get you scholarship, hang up.
16. Mistakes in Grammar and Spelling  – Surprisingly, many scholarship scams have multiple misspellings and grammar errors on their websites. For example, they may misspell the word “scholarship” as “scholorship”. If any scholarship application form or website includes errors in English usage, investigate that scholarship; it may be a scam.
17. Unsolicited Opportunities – Scholarship sponsors will not normally contact you unless you have first contacted them. If someone does call from a “scholarship” that you never contacted, beware. I could easily be a scam.
18. “50% of Applicants Win!” – If a scholarship professes unusually high success rates, then either all the world’s best students applied for it or the scholarship is a scam. Avoid all scholarships of this type.
19. Mail Drop Box Address – If a scholarship fund lists a P.O. Box or residential address as its location, the scholarship is probably a fake. Most legitimate scholarships have business addresses. To recognize disguised drop box addresses, use the mail drop search form.
20. Other Fees – Some fake scholarships charge a fee. They try to convince you that you must pay tax, postage, or some other fee before you can get you student grant. Never pay one of these companies. Legitimate scholarships will deduct any necessary fees from the scholarship amount.
21. “Everyone is Eligible” – All scholarship sponsors are looking for the candidate who best matches their criteria. Some sponsors are looking for the best academic students. Others are looking for minorities. Still other scholarships are available to excellent athletes. None, however, are given to students for just breathing. Watch out for scholarships that claim everyone is eligible; most likely, they want all students to be “eligible” to loose money.
22. Masquerading as a Non-profit – Many scams try to establish trust by pretending to be non-profits. Just because the company’s name has the word “fund” or “foundation” in it, does not mean that it is a true non-profit organization. It could be a for-profit business…or a scam!
23. “$6.6 Billion Went Unclaimed Last Year” – Many scholarship search scams use this method. They will try to tell you that some huge amount of money went unclaimed last year. This is not true. No scholarship searches has ever proven this claim. No scholarship search has ever shown the list of unclaimed scholarships.

By Nate Desmond on April 3, 2009
Source: http://www.debtfreescholar.com/2009/04/23-warning-signs-of-scholarship-scams/