She is a single mother of 2, so when the notice arrived saying she had been approved for a $7000 educational grant from The Federal Reserve of New York, she thought it was a miracle and a dream come true. What she didn’t realize until later is that she was about to fall prey to the return of an old scam.
The caller told her she “just needed to send them a few hundred dollars” to cover taxes, fees, etc., and the money would be hers. $9000 in lost wired money later, a local reporter for Fox 2 television aired her story last night. As with all scam victimization, the story is heartbreaking.
This is a classic example of an advance-fee scam, one in which the crook tells you you’ve won a prize (or a grant) and you just need to send them some money. My readers and those who attend my talks will recognize that this is very similar to the scam that hurt Bill, my stepfather, in the form of a phony sweepstakes. As you may remember, he lost over $70,000.
This scam was big about 2 years ago, and seems to be making a comeback, according to an official of the BBB here in St. Louis. I looked at the website for the Federal Reserve of New York, and they have warnings prominently listed, including for different variations on this ploy. Scammers use the impressive name and implied authority of the Federal Reserve Bank to lend an air of legitimacy, but if you’ve been to my talks or read my book, you’ll know that it involves at least 3 Dead Giveaways for a Scam:
1. The scammer chose the victim (remember: never let yourself be chosen, always do the choosing)
2. Asking for money for a prize (or grant)
3. Asking the victim to wire money, especially with things like Green Dot Money Paks and other pre-paid cards
Remember also the 3rd R of scam prevention: Reach out to check it out. Got a notice that you’ve been approved for some free money? Call the purported granting organization, the BBB, your state’s Attorney General, or send me an email at email@example.com and do a little checking. As always, if it sounds too good to be true, it is!
You can watch the video of the story here, and thanks to Fox 2 St. Louis for airing the story.
Thanks for reading,