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One way to avoid scholarship scams is to follow the old adage "If it sounds too good to be true, it probably is."

Unfortunately, each year thousands are defrauded by fly-by-night websites and established organizations that prey on a family's desire to fulfill their college dreams.

Scholarship scams soak families for more than $100 million annually.

Name is the same

Scholarship scam operations often take the names of legitimate government and nonprofit organizations and turn them into a profit-making ventures. They even use the words "national," "federal," "foundation" or "administration" and frequently create a .org website to make you think it's a nonprofit.

Skip application fee

When you are asked for an application fee, think twice. There are scholarship sites that ask you to send them money up front. Most people don't complain because they assume they didn't win.

The fees may be small, $5 to $50, so often people adopt more of a "why not?" attitude and send in the application and fee. The scams typically receive roughly 10,000 applications ($500,000) and may in fact pay out the one $1,000 award. Obviously, a very profitable scam.

Read carefully

When you think you've found the best loan, read the fine print. The advance-fee loan scam offers a low-interest educational loan, but requires that you pay a fee. Make sure you deal with a bank or other reputable lender. Real educational loans never require an up-front fee.

Be suspicious

When you receive unsolicited mail telling you you've won a scholarship worth thousands of dollars, but you have to send money to claim it, don't do it.

The other variation is receiving a check made out to you, but before it can be cashed, you are required to send a check to the company for the "taxes" or other fees.

Listen closely

When you hear about financial aid "seminars," check out the website of the seminar host and make sure that it is not really just a sales pitch for a fee-for-service operation.

Insurance companies and brokerage firms sometimes offer seminars and frequently try to sell insurance, annuity and investment products.

You are not required to purchase any investment products as a prerequisite to receiving federal student aid.

'Guarantee' is worthless

When you hear from a scholarship matching service that "guarantees success" or it will refund your money, don't walk, run the other way.

Nobody can guarantee you'll win a scholarship. The listing of scholarships the service sends will not be very different from what you can do on your own, for free, at and

Watch out for ...

--Excessive hype about high success rates or "free money."

--No telephone number or website.

--A post office box for a return address.

--Time pressure, being asked to respond immediately or lose the money.

--Notification by phone, expect written communication from a legitimate organization.

Lee Bierer is an independent college adviser based in Charlotte. Visit