How to spot a scholarship scam

While there are plenty of scholarship opportunities and financial planning services for students wanting to go to college, there are also plenty of scam operations.

Some of the telltale lines to listen for include:

• “The scholarship is guaranteed or your money back.”
• “You can’t get this information anywhere else.”
• “I just need your credit card or bank account number to hold this scholarship.”
• “You’ve been selected” by a “national foundation” to receive a scholarship.

For a fee, frequently running into thousands of dollars, such companies will often promise to prepare personalized financial aid reports and customized strategies to maximize the amount of financial aid you receive. In reality, they usually only provide general information that you could obtain on your own.

There are companies out there that do a fine job of pulling all your information together, but just be cautious. When it sounds too good to be true, it probably is!

If you do attend a seminar that is selling financial aid or scholarship services, keep the following things in mind:

• Take your time. Do not allow yourself to be rushed into paying at the seminar.
• Investigate the organization before spending your money. You may be able to get the same help for free.
• Be cautious if seminar rep­resentatives are reluctant to answer your questions. Legitimate businesses are more than willing to give you information about their services.
• Ask what the total fee will be, what services the organization will provide and what the company’s refund policy is. Be sure to get this information in writing.

Source: Federal Trade Commission