ACCC warns SMEs over false government grants

Small businesses should be wary of scam websites claiming access to government grants, according to the Australian Competition and Consumer Commission.

The ACCC says sites have emerged charging a fee to access government grants, which normally can be accessed for free.

Scammers inform the recipient they have received a government grant and request a fee of $199 to release the grant funds. They may also request $4,000 to “contribute to charities to pay off government debt”.

When small businesses pay the fee, they find they are not eligible for the grant. A spokesperson for the ACCC says people need to be more alert to avoid making this mistake.

The consumer watchdog says it is also concerned that some overseas-based websites give the impression they are endorsed by the Australian Government, citing the Australian Business Funding Centre website as an example.

The ABFC and other websites present education material about government grant programs, and sometimes even news and videos showcasing successful grant recipients, suggesting the website is a service provided and endorsed by the Australian Government.

However, on closer inspection, such websites reveal disclaimers acknowledging no affiliation with the government.

The ABFC website also has disclaimers revealing the ABFC has no part in the success of most, if not all, of the grant recipient stories published on its website.

“The ACCC is concerned that such disclaimers can be easily overlooked, especially by people who are more comfortable calling the phone numbers or using the other contact points, which are displayed on more prominent parts of the webpage,” the spokesperson says.

In a separate case, the ACCC recently reported an increase in scams impersonating government departments or major businesses.

“Scammers claiming to represent the fictitious Australian Government Grants Department may fool you into believing they are legitimate as they may already have your personal details,” the spokesperson says.

“The scammers also claim that they operate the Government GrantsLINK directory website. This website is a legitimate Australian Government website… It does not provide grants funding and is not affiliated with the scammers.”

Despite the various scams, the spokesperson says no one should be discouraged from applying for legitimate small business grants provided by the government.

Businesses can protect themselves from scams by remembering the following:

• The Government doesn’t cold call you to tell you about grants.
• The Government doesn’t accept payment via wire transfer.
• All Australian Government websites use the .gov.au extension.
• All decisions about grants are based on merit; you can’t pay for special access.
• Where you may wish to use the services of a third party to assist in preparing grant applications, choose a reputable service by doing your homework first.
• If you have signed up to a questionable service and have paid by credit card, discuss your recovery options with your provider.

This article first appeared on StartupSmart, Australia’s number one site for starting a business.