According to the Federal Trade Commission, many students and their families are falling prey to scholarship scams. Unscrupulous companies guarantee or promise scholarships, grants or fantastic financial aid packages. Many use high-pressure sales pitches at seminars where you are required to pay immediately or risk losing out on the "opportunity".
Some unscrupulous companies guarantee that they can get scholarships on behalf of students or award them "scholarships" in exchange for an advance fee. Most offer a "money back guarantee", but attach conditions that make it impossible to get the refund.
The FTC cautions students to look for the following tell-tale lines:
-- "We'll do all the work"
-- "You're a finalist in our contest"
-- "You can't get this information anywhere else"
-- "The scholarship requires a small processing fee"
-- "The scholarship is guaranteed or your money back"
-- "You've been selected by a 'national foundation' to receive a scholarship"
-- "I just need your credit card or bank account number to hold this scholarship for you"
Remember that most scholarship sponsors do not charge up-front fees to apply for funding, and no legitimate scholarship sponsor can guarantee that you will win an award. Also, be wary of free seminars that turn into high-pressure sales pitches for financial aid information which is readily available for free. Reputable companies neither guarantee scholarships nor use agressive tactics.