Free money always has a cost. Many are now learning this the hard way, as scammers increasingly try to trick potential victims with fraudulent government grant offers.

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Not only are the grants not real, but when unknowing consumers agree to participate, they are robbed of thousands of dollars. The increased activity and growing acumen of scammers has prompted watchdogs to issue warnings to be on the lookout for such messages.

The latest activity comes at a time when inflation has taken its toll on many households and scammers are preying on vulnerable populations – especially the elderly – with messages that could be mistaken for a relative or friend offering useful advice.

Typically, this comes in the form of a text message or social media post reflecting someone’s profile or phone number that the person actually knows. The message will inform the recipient that the government is offering grants of $50,000 or more to help deal with the economic pressures caused by COVID.

If the person responds, they will be informed that there is an application process that requires the purchase of gift cards or the deposit of money before the lump sum grant is processed. Of course, there is no subsidy and the scammer on the other end walks away with hundreds, if not thousands of dollars. According to the AARP Fraud Watch Network, which spoke to the Detroit Free Press about the scams, one person lost up to $10,000.

According to a recent Better Business Bureau report, 44% of Americans have been approached with a scam by a government impostor and 77% of respondents were aware of the practice. Since 2014, scammers posing as government agencies have scammed a total of $450 million from unknowing Americans.

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Of course, these practices are not new. However, scammers are becoming increasingly brazen and clever in the way they approach people to gain their trust, often capitalizing on disasters like the current pandemic and weak economy as many desperately search for solutions. With the popularity of social media and increasing security vulnerabilities, many scammers are able to hack into a person’s profile to make the message appear genuine.

In other cases, the information appears to come from a reliable entity. The recent flooding in Kentucky has caused an increase in scams that appear to stem from FEMA asking those applying for relief funds to pay a processing fee first – this is never FEMA procedure. Some even reported being offered federal student loan relief as their children returned to school.

But don’t lose hope, because there are ways to protect yourself. Due to the spike in cases, the US Department of Health and Human Services released some advice, also sharing that “no legitimate federal government employee would ever call you to tell you that you qualify or have been approved for a grant for which you have never applied”, and adding that “it is illegal to ask you to pay to apply for or to increase your chances of obtaining a federal grant”. It should also be noted that there is never a charge to receive information or apply for a government grant, and all applicable options are listed on www.grants.gov. Nor will the government call you asking for money.

The agency warned that scammers use HHS letterhead or logos to appear official; HHS never uses private companies. And just because the call appears to have a Washington, DC area code, doesn’t mean it’s legit – scammers have found ways to use phantom numbers while calling from anywhere in the world . HHS recommends always researching the number and verifying that it is the official number listed on the agency’s website.

Here are some other tips offered by HHS to help protect you from the current wave of government grant scams:

1. Never give out your bank account information unless you know the company that contacted you and can verify that they need to know the information.
2. If the person is asking for wire transfers, gift cards or prepaid debit cards or peer payments like Venmo, that’s a big red flag. These are as untraceable as cash and once it’s gone, you won’t be able to get the funds back.
3. Check the usa.gov website to access the full index of official government agencies. Scammers will make up names that closely resemble government offices, so a quick check will let you know if it’s a fake.
4. Take action by signing up for the National Do Not Call Registry to reduce the calls you receive (register online at donotcall.gov). If you come across a scam, you can report it to the FTC at reportfraud.ftc.gov.

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A final helpful tip is to search for similar complaints online. If you copy/paste the message or look up the phone number contacting you, you can often find information that it’s a scam and avoid interacting with the person on the other end. .