Iowa Attorney General Tom Miller calls it a, "Nasty Scam". The old counterfeit check scam with a twist. This time, targeting college students.
Miller is warning students to beware if they receive a letter from Grant Prospect, Inc. of Orlando, Florida. The letter informs a student that he or she has been approved for a grant of $50,000. The money is not a loan and they don't have to pay it back.
Now comes the red flag.
Enclosed in the envelope is a check for $4,420.62. The letter explains the money is to be used to pay the recipient's federal and state processing fees. A $40,000 certified check would be delivered to the student one or two days after the required feeds were paid.
Here's what really happens: Since the counterfeit is so realistic, a bank will cash it. The student wires the money to the scammer, posing as a fee collector. The counterfeit check bounces a few days later, and the student learns a very expensive lesson.
The offer has more red flags than a 30-car NASCAR pile-up. The example letter provided by the Iowa Attorney General includes a telephone number in Canada and a non-existent address in Orlando, Florida.