Spotting a scholarship scam

Signs the FTC warns about

The Federal Trade Commission describes several patterns in scholarship fraud. A service asks for a fee to find awards for you, to apply on your behalf or to hold an award it says you have won. Another claims the results are certain or offers a refund if you win nothing, often with conditions that make the refund nearly impossible to collect.

A message saying you have been selected for a scholarship you never applied for is a common opening. So is a request for a bank account or card number to verify you or to pay a processing charge. Free seminars that end in high-pressure sales of a paid service are another pattern the FTC describes.

How real sponsors behave

Legitimate sponsors publish their rules, ask you to apply and choose winners from the applicants. They pay the award to your college or to you, and they never ask you to pay to receive it. A real sponsor can tell you who funds the award and who sits on the committee.

Filing the FAFSA costs nothing, and neither does searching for scholarships through your high school counselor, the college aid office, the public library or the U.S. Department of Labor's CareerOneStop scholarship finder. Anyone who charges to file the FAFSA or to claim federal aid is selling something the government provides at no cost.

What to do if you see one

Stop before paying anything or sharing financial details, and look up the company name alongside words such as complaint or scam. Ask your counselor or the college aid office whether they know the sponsor. If you already paid, contact your bank or card company quickly to ask about disputing the charge.

Report scholarship fraud to the Federal Trade Commission at ReportFraud.ftc.gov and to your state attorney general's consumer protection office. Keep copies of letters, emails and receipts. A report helps investigators even when the money cannot be recovered.