A student may see an ad in the paper or visit a web site that guarantees a scholarship if the company receives a finder's fee. The company often fails to provide the student with any viable scholarship leads, despite its guarantee. Then the company makes the process for receiving a refund of the fee difficult or next to impossible when the student does not receive a scholarship.
Most students just give up instead of pursuing the refund.
The Act expands existing protection against fraud for students seeking scholarships for postsecondary education. In addition, the Act requires the Attorney General, ED, and the FTC to submit an annual report to Congress concerning fraud in the offering of financial assistance for purposes of funding higher education. These, in addition to existing penalties that allow the FTC to shut down fraudulent companies and seek restitution for defrauded students, should help to deter such scams.