Author
of "Free Money to Pay Your Bills"
admits there's no free money to pay your bills
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Behind
advertising for 'billions in hidden money'
Lesko book reveals that most government grants come
from Food Stamps, Medicaid, other entitlement programs
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CPB report also sees a new & growing wave
of government-grant scams hurting consumers
Multi-million-dollar
advertising and a new book by author Matthew Lesko are peppered
with exaggerations and half-truths about government grants, according
to a report released today by the New York State Consumer Protection
Board ("CPB").
The
CPB's report, "Secrets Revealed! How Misleading Advertising
Is Feeding a Nationwide Boom in Government Grant Scams," shows
that misleading information by Lesko and others is feeding a
growing number of government-grant scams now hurting consumers
across the country.
“Lesko is now promoting a new book, 'Free Money to Pay Your Bills,' by
claiming that the federal government has more than $350 billion in 'hidden money'
that ordinary people can use to pay their credit-card bills and 'get out of debt.'
That claim is simply not true," said CPB Chairperson and Executive Director
Teresa A. Santiago.
Chairperson Santiago said, "Privately, this company admits there
is no 'free money to pay your bills' despite advertising contrary information
on radio, late-night TV and Internet advertising. This myth has helped
to create a growing industry of books, tapes, web sites and, unfortunately,
many, many scam artists who say they can help consumers find 'hidden
money' from the government. ”
The
CPB is now helping New York consumers victimized in several ongoing
government-grant scams. These include at least four telemarketing
networks which falsely "guarantee" government grants
of $5,000, $8,000 and up to $25,000 per customer.
The
Federal Trade Commission and other agencies recently reached
a half-million-dollar settlement with a fourth telemarketer accused
of similar deceptive practices.
Lesko's
book offers useful information about scholarships and other programs
and his company offers refunds to dissatisfied customers, Chairperson
Santiago noted. "Many other government-grant offers are
outright scams, offering no benefit whatsoever to consumers," the
Chairperson said.
These scams and other grant offers have benefited -- in some cases,
directly -- from the business practices of Mr. Lesko's Maryland-based
company, Information USA Inc. For example, Information USA compiles
and sells direct-marketing lists with the names, addresses and other
information of Lesko's customers. These lists have been used by other
companies to sell services such as debt repair, and, in at least two
cases, Lesko customer lists were sold to outright scams involving government
grants.
Two
companies -- Grant PAC and Grant Search Inc. -- were charged
with deceptive practices in a $2.6 million complaint by the Federal
Trade Commission. The firms both purchased Lesko customer lists
but were given a chance to settle the FTC charges last year by
paying a $296,000 settlement and agreeing not to market government
grants in the future.
Another
buyer of Lesko customer lists is a Rochester, N.Y. company called
National Grants Conferences. The seminars and high-priced products
sold by National Grants Conferences has been the source of numerous
consumer complaints for several years.
The
report also cites a New York City publisher, FPH Communications,
for misinformation in one of its grant guides. Consumer who bought
this paperback guides are now being targeted by grant-scheme
telemarketers after FPH sold its customer lists to other direct
marketers.
In
releasing a report on the activities of Lesko and other government-grant
companies, Chairperson Santiago said the CPB hopes to dispel
the myths that are confusing consumers and helping to feed government-grant
scams.
In
a statement for the CPB's report, the U.S. Office of Management
and Budget agreed with the CPB's findings:
The federal
government now has two websites designed to bring grants information
together from many different agencies and sources: www.GovBenefits.gov
and www.FirstGov.gov. Both websites contain information on
hundreds of grant programs, both federal and state.
" The number of companies and outright scams — all
selling “government grants” or guides to government
grants — is growing," the report reads. "All
of these offers are built on the false idea that individuals
are eligible to receive thousands of “unclaimed” dollars
from the government — money they can use to pay for almost
anything."
A different story is told in statements from
a Lesko company spokesman -- and even in the pages of his new
book," Free Money to Pay Your Bills." They reveal
that there are no government grants available to pay someone's
credit-card bills and similar personal expenses."
Instead the 'hidden' billions that Lesko promotes
in a $3 million advertising campaign mostly come from Food
Stamps, Medicaid and other well-known government programs.
These programs are not mentioned in his advertising on television,
radio and on numerous websites by independent Lesko "distributors."
In a statement to the CPB, Lesko's co-author,
Mary Ann Martello, wrote, "Matthew would say that money
the government gives you to pay other bills frees up money
to pay your credit bills. There is no maoney (sp) the government
will give you to directly to (sp) pay down your credit bills,
but the $800 in food stamps frees up that money for other bills."
Chairperson Santiago said, "There are no
billions of dollars in 'Free Money to Pay Your Bills' as Mr.
Lesko claims on radio, late-night TV and Internet advertising.
But this myth has helped to create a growing industry of books,
tapes, web sites and, unfortunately, many, many scam artists
who say they can help consumers find 'hidden money' from the
government.
"Many even 'guarantee' a government grant,
but privately admit that they are only guaranteeing a refund
-- a refund that many consumers have trouble collecting because
customer service numbers are constantly busy. We are pleased,
however, that the CPB has been able to help consumers receive
refunds from at least one telemarketer and its 'guaranteed'
offer."
In addition to misleading claims in Lesko's advertising,
the CPB also found more exaggerated claims about government
grants on websites operated by a network of independent Lesko
distributors. These distributors use Lesko advertising material
and receive 40 percent of the sales of Lesko books and other
products.
There are some grants out there but the vast
majority of these dollars are for low-income consumers or senior
citizens, Chairperson Santiago said. In other cases, government
dollars are offered through contracts, loans, direct services
or financial assistance for businesses and other organizations.
In Lesko's book, however, all of these dollars are described
as 'grants.'"
In advertising for his book, "Free Money
to Pay Your Bills," Lesko also: