Federal Grant Letter or Call: Why It's a Scam

A letter, call, or message says you've been approved for a federal or government grant — often thousands of dollars — and you only need to pay a small fee to release it.

How the federal grant scam works

There is no grant. The “processing fee,” “insurance,” or “transfer charge” is the scam, and after you pay once, they invent more fees until you stop. Real government grants require an application, and you never pay to receive one.

Red flags to watch for

• You're awarded a grant you never applied for
• Any fee is required to “release” or “process” the money
• The agency name sounds official but can't be found on usa.gov
• Payment is requested by gift card, wire, app, or crypto

What it looks like

“You have been selected for a $9,500 federal relief grant. To release funds, a $199 processing fee is required.”

What to do

1. Never pay to receive money — that alone proves it's a scam.
2. Real federal grants exist only at grants.gov, and you must apply for them.
3. Recycle the letter or hang up; don't call the number they provide.
4. Report it to the FTC at 1-877-382-4357.

Other common scams