Beware: Stimulus scams abound

You likely have money coming to you from the stimulus bill, but you won't need to pay someone to get it.

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By Walter Updegrave, Money Magazine senior editor

Walter Updegrave is a senior editor with Money Magazine and is the author of "How to Retire Rich in a Totally Changed World: Why You're Not in Kansas Anymore" (Three Rivers Press 2005).

NEW YORK (Money) -- Question: How do you apply for a government stimulus grant? And are the stimulus grants I see offered on Web sites real or a hoax? --Laurie, Mount Pleasant, Michigan

Answer: The ink was no sooner dry on president Obama's signature on the stimulus package -- aka, the American Recovery and Reinvestment Act of 2009 -- than all sorts of bottom feeders began looking for ways to exploit the package to stimulate their own finances.

Some sites claim to offer low-cost lists of stimulus grants you can apply for. Others say they can help you qualify for stimulus money or suggest they can get you an inside fast track to a stimulus check. Still others see the stimulus package as a marketing tool, using the draw of stimulus cash as a way to get you to buy a debt-reduction plan or other financial service you probably don't need.

And, of course, that always-present band of email scamsters aren't above using the lure of free government cash as a way to worm their way into your financial accounts and steal your money. So don't be surprised if you get an email from a "government agency" asking you for bank account info so that your share of the stimulus funds can be conveniently deposited into your account.

Indeed, this problem has gotten so bad that the Federal Trade Commission issued a press release warning consumers specifically about scams tied to the stimulus package. Better Business Bureaus in several parts of the country have also warned about these kinds of come-ons, as have the attorney general offices in several states.

What can give some of these ploys traction -- aside from the natural appeal of getting something for nothing -- is that the stimulus package itself is so broad and contains such a welter of different tax credits, payments, deductions and other goodies that many people are overwhelmed and confused by it.

I've explained various provisions of the legislation that may directly or indirectly benefit retirees. My CNNMoney colleague Jeanne Sahadi has done the same for the broader population, and the Small Business section of our site contains a detailed look at the ways small companies may be able to take advantage of the stimulus bill.

As you read through these stories or hear about the stimulus in other ways, there is one important thing to keep in mind: You don't need a middleman to get you whatever you may have coming to you from this legislation.

For example, if you qualify for the $400 ($800 married couples) Make Work Pay credit, you will most likely get that money by having less withheld from your weekly, biweekly or monthly paycheck. Otherwise, you would claim it as a credit on your tax return. You don't have to apply for it. And no person or service you pay is going to get you any more than the credit allows, nor will any person or service get you the money any sooner (except, perhaps, by making you a loan, in which case, check the interest rate).

Ditto for the $250 checks to Social Security recipients. These will be sent out by the government. You don't need to apply for the funds and no person or company is going to get you the cash sooner. Anyone saying otherwise is either trying to sell you a service you don't need or otherwise trying to separate you from your money.

The same applies, by the way, to provisions such as the first-time homebuyer's $8,000 tax credit, the new sales deduction for new car buyers and other goodies.

In the case of expanded unemployment benefits, you can check with your local unemployment office to see what you're entitled to. And to see if you qualify for subsidies for Cobra coverage for the jobless, you can contact your former employer or check out the Department of Labor's site on extended Cobra assistance, which includes a toll-free number for contacting a benefits adviser.

So if you come across a Web site festooned with photos of president Obama that purports to be brimming with stimulus cash that is yours for the asking, ignore it. Nothing good will come from pursuing it.

Similarly, if you get an email from some helpful soul whose dearest wish is to get your stimulus check deposited as quickly as possible into your bank account so no scam artist can get his hands on it, remember: the emailer is the scam artist. So don't open the email or, if you do, don't click on any of its links, as they may contain software that could make you a victim of identity theft.

Finally, no government stimulus provision ever requires you to hand over your credit-card information, period.

This recession is going to be tough enough to get through what with the massive job losses, sharply declining housing values and the stock market in meltdown mode. Don't make it worse on yourself by spending money on financial services you don't need or, worse yet, opening the door to con men and flim-flam artists.

Got a question for the expert? We want to hear from you. Post your video or typed question to Walter Updegrave's iReport page and your question could be answered in the next Ask the Expert column or video.  To top of page

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