Is Fema Giving Out Money

Beware of scam involving FEMA handing out $500 to those affected by COVID-19

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Posted: Mar 2, 2021 / 03:38 PM EST / Updated: Mar 2, 2021 / 08:28 PM EST

RALEIGH, N.C. (WNCN) — There's a new scam out there that uses the name of the Federal Emergency Management Agency to offer you free money, but there's a catch because it will end up costing you cash instead.

Karen Crew designs and sells jewelry and the other day the Knightdale woman thought she was getting a gem of an offer — $500 from FEMA because she's been affected by COVID-19.

The offer supposedly came from a Facebook friend.

"Because I'd know her really well," Crew said "I sent her my Cash App and said "Is this for real?"

She said the person replied, "I wouldn't lie to you."

The conversation was via text from Facebook Messenger.

Crew said at one point in the conversation, she made a phone call and discovered the person who was supposed to be talking with her had her account hacked.

That became clear as the text messaging continued.

First, the person asked Karen to purchase a $100 dollar gift card and pay through Cash App.

That purchase request had Crew puzzled. She wanted to know why FEMA would ask for a gift card.

She said the scammer texted a convoluted answer filled with doubletalk claiming at the end of the message "It was all real and legitimate."

The scammer then began pushing her to get to a store and buy a gift card, saying it didn't matter which kind as long as it was for $100 dollars. That was the final red flag for Crew.

"Why do I have to purchase a GIFT CARD and scratch off the back of it in order to get money from FEMA?" she told consumer investigator Steve Sbraccia.

The Federal Trade Commission paying a government agency with a gift card is the surest way to lose money.

"Anyone who tells you to pay with a gift card is a scammer," said the FTC. "Once you've scratched a gift card and give out the PIN, your money is probably gone."

Crew said she is fortunate she got out of the situation without being taken advantage of when she realized things weren't adding up.

"I thank God, because it was really quick thinking," she said.

What makes it more confusing to some people is that FEMA does have a program where it will reimburse some individuals up to $7,000 for Covid-19 related funeral expenses, but that program does not involve gift cards.

There is no FEMA program offering $500 in cash in exchange for an initial gift card payment.

Experts say to never, ever use a gift card to send money to a government agency–they don't do business that way.

If you have doubts about what you're being told by someone claiming to be with a government agency, hang up and contact the agency directly to ask questions.