Prize, fee, and payment tricks · Also called free government grant scam, advance-fee loan scam, guaranteed loan scam, loan processing fee scam
Fake government grant and advance-fee loan scam
A fake grant or loan scam promises free government money or a guaranteed loan, whatever your credit history, and then asks for a processing, insurance, or application fee before the money is paid. After you pay, the grant or loan never arrives and the scammer disappears.
How it works
- Scammers advertise online, send messages, or call with a caller ID that looks like a government agency or lender.
- They say you qualify for a grant for bills, education, home repairs, or a business, or that your loan is approved.
- They ask for personal details and then a fee for processing, insurance, or taxes before the money can be released.
- They take the fee, often by gift card, wire transfer, or cryptocurrency, and there is no grant and no loan.
Red flags
- Someone contacts you out of the blue to offer a free government grant.
- A lender guarantees you a loan regardless of your credit history.
- You must pay a fee before you can receive the grant or loan money.
- You are asked to pay by gift card, cash reload card, wire transfer, or cryptocurrency.
If you are targeted
- Stop contact: hang up or stop replying, and do not pay any fee.
- If you paid, contact your bank, card issuer, or payment service straight away and ask for the payment to be reversed.
- If you shared your Social Security or bank details, tell your bank and watch for identity theft.
- Report it. Our Report a scam page lists where to report in your country, such as ic3.gov and ReportFraud.ftc.gov in the US.
Prevention
For individuals
- Know that the FTC says the government will not call, text, email, or message you to offer free grants.
- In the US, look for federal grants only on grants.gov, where the list is free.
- Check that a lender is registered in your state with your state attorney general or banking regulator, and never pay up front for a promised loan.
For organisations
- Ad platforms can remove ads for free government grants and for loans guaranteed regardless of credit.
By the numbers
Figures are for the reporting category this scam falls under, not this scam alone.
| Advance fee losses reported to the FBI IC3 in 2025 | $155.9M | US, 2025, FBI IC3 |
Real cases
No documented case in the atlas yet. New cases are added as they are sourced.
Delivered through: Voice phishing (vishing), Social media ads and posts
How official datasets classify it
- FBI IC3
- Advanced Fee
- FTC
- Advance-Fee Credit
- UK Finance
- Advance fee scam
Questions
- Will the government call me about a free grant?
- No. The FTC says the government will not call, text, email, or message you to offer free grants. The only place to find all federal grants is grants.gov, and that list is free.
- Is it normal to pay a fee before a loan is paid out?
- No legitimate lender guarantees you a loan in return for an up-front fee. In the US it is illegal for telemarketers to promise a loan and ask you to pay before you get it.