Fraudulent scholarship offers come in pretty packages, posing as legitimate foundations, scholarship sponsors, or scholarship search services. These businesses advertise in campus newspapers, distribute flyers, mail letters and postcards, provide toll-free numbers, and even have sites on the Web. Some of the more obvious frauds operate as scholarship search services or clearinghouses, and the least obvious are often set up as an illegitimate scholarship sponsor.
It may be hard to imagine how an agency that plans to give you money can actually take it away from you, but it's really quite simple. Most of these scammers pocket money from fees they charge you and thousands of other hopeful scholarship seekers, but give out little or nothing in proportion to the amount they collect. In the worst case scenarios, hopeful students are conned into giving out their credit card or checking account numbers, leaving them vulnerable to getting seriously ripped off through unauthorized withdrawals.
In spite of the existence of illegitimate programs, there are legitimate scholarship search services that charge a small fee. However, since they cannot honestly guarantee you a scholarship, you're better off doing your own legwork using a reliable scholarship information source. Better yet, try using a free scholarship search service like Peterson's, which offers free access to millions of scholarships - without charging you a dime!
There are lots of wonderful scholarships out there. You simply need to spend the time and effort required to locate and apply for them. Just remember: if anyone asks for your money, check them out thoroughly!