Military personnel, often admired for their bravery and dedication, face unique challenges beyond the battleﬁeld. As they navigate the complexities of military life, servicemembers may also ﬁnd themselves targeted by unscrupulous individuals seeking to exploit their unique vulnerabilities. Frequent relocations, separation from
family, and the stresses of deployment can make military consumers more susceptible to scams.
This article will explore some of the most common scams targeting military personnel and provide valuable tips on recognizing and avoiding falling victim. By increasing awareness and understanding of these scams, we aim to empower servicemembers and their families with the knowledge and tools to protect themselves and maintain
their ﬁnancial well-being.
Predatory Lending Targeting Military Personnel
Predatory lending involves lenders exploiting borrowers through unfair or fraudulent actions. Military personnel can be prime targets due to their steady income and
potential inexperience with ﬁnances. We’ll discuss predatory lending schemes aimed at servicemembers and provide tips for identifying and avoiding them.
- High-Interest Payday Loans: Payday loans are short-term, high-interest loans typically due on the borrower’s next Some lenders set up near military
bases, offering quick cash with exorbitant rates and fees, trapping borrowers in debt.
- High-Cost Auto Loans: Some auto dealerships and lenders target military personnel with high-cost auto loans, advertising special deals but charging excessive rates, hidden fees, or unfavorable
- Rent-to-Own Scams: Rent-to-own agreements can appear attractive to military families but often involve inﬂated prices, high-interest rates, and unfavorable
terms, costing consumers far more than the item’s actual worth.
Tips for Identifying and Avoiding Predatory Lending:
- Research Lenders: Check online reviews, consult the Better Business Bureau, and look for complaints about the company before entering a loan
- Understand the Terms: Read the loan agreement carefully, ensuring you understand the interest rate, fees, and repayment Seek clariﬁcation or consult a ﬁnancial advisor if needed.
- Know Your Rights: Familiarize yourself with the Military Lending Act (MLA), which protects active-duty servicemembers and caps interest rates on most consumer loans at 36%.
- Seek Alternatives: Explore alternative lending options, such as loans from
reputable banks, credit unions, or military relief societies offering fair terms and better interest rates.
Identity Theft Targeting Military Consumers
Identity theft is a serious concern for all consumers, particularly military personnel who may be targeted due to their unique circumstances. Fraudsters may use servicemembers’ personal information to commit various forms of fraud. We’ll discuss identity theft tactics targeting military consumers and provide protection and
Examples of Identity Theft Tactics:
- PhishingScams:Fraudulent emails or texts impersonating military organizations trick servicemembers into revealing sensitive information or login
- Data Breaches: Cybercriminals target military databases, contractors, or organizations handling personnel data to steal sensitive
- Dumpster Diving: Thieves rummage through trash for documents containing personal
- Deployment-Related Identity Theft: Fraudsters exploit a servicemember’s deployment by stealing their identity while
Tips for Protecting Against Identity Theft:
- Safeguard Personal Information: Shred sensitive documents and avoid sharing personal information
- Use Strong Passwords: Create complex, unique passwords and enable two-factor
- Monitor Credit Reports: Regularly review credit reports and place an active duty alert during
- Be Cautious of Unsolicited Communications: Verify the legitimacy of requests for personal information before providing
Taking Action If Victimized:
- Report the Theft: Notify the FTC, local law enforcement, and your military chain of
- Place a Fraud Alert: Contact a central credit bureau to place a fraud alert on your credit
- Close Compromised Accounts: Contact ﬁnancial institutions to close fraudulent accounts or accounts opened without your
- Dispute Fraudulent Charges: Contact your bank or credit card company to dispute unauthorized
Fraudulent Investment Schemes Targeting Military Personnel
Financial fraudsters often target military personnel and their families with fraudulent investment schemes, lured by the prospect of a steady income and perceived ﬁnancial inexperience. These scams can result in signiﬁcant ﬁnancial losses and undermine the ﬁnancial stability of servicemembers. This section will discuss speciﬁc examples of
fraudulent investment schemes and provide tips for recognizing and avoiding them. Examples of Fraudulent Investment Schemes:
- Ponzi Schemes: High investment returns are promised by con artists, who use funds from new investors to pay returns to earlier investors. When there are not enough new investors to cover the returns, these schemes eventually fail, leaving the participants with sizable losses.
- Pump-and-Dump Scams: Fraudsters manipulate the price of low-value stocks by promoting false information, causing the stock price to Once the price is
artiﬁcially inﬂated, they sell their shares, leaving investors with worthless stocks as the price plummets.
- Aﬃnity Fraud: Scammers exploit personal connections, such as military aﬃliation, to build trust and convince others to invest in fraudulent They may claim to be military veterans or have a particular interest in helping servicemembers achieve ﬁnancial success.
Tips for Recognizing and Avoiding Fraudulent Investment Schemes:
- Conduct Thorough Research: Investigate the investment opportunity, the company, and the individuals involved. Check for any red ﬂags, such as a history of fraud, regulatory actions, or criminal charges.
- Be Wary of Unsolicited Offers: Exercise caution when presented with unsolicited investment opportunities, especially those promising high returns with little or no
- Verify Credentials: Check the credentials of the investment professional or company with the appropriate regulatory agencies, such as the Financial Industry Regulatory Authority (FINRA) or the Securities and Exchange Commission (SEC).
- Seek Independent Advice: Consult a trusted ﬁnancial advisor or attorney before making investment
- Trust Your Instincts: If an investment opportunity seems too good to be true or raises suspicions, trust your instincts and walk
Common Vehicle Fraud Scams Targeting Military Personnel
Military personnel can be vulnerable to various vehicle fraud scams due to frequent
relocations and the need for reliable transportation. Scammers take advantage of these situations to exploit servicemembers and their families. This section will discuss common vehicle fraud scams, including odometer rollback, title washing, deceptive auto ﬁnancing, and lemon cars, and provide tips for identifying and avoiding them.
- Odometer Rollback: Scammers alter a vehicle’s odometer to display a lower mileage, making the car appear less used and more They may target military personnel who are looking for affordable, reliable transportation.
- TitleWashing: Fraudsters “wash” a vehicle’s title by transferring it through
different states with varying title laws, removing any indication of prior damage, such as salvage or ﬂood titles. Military personnel, who often move between states, can be targeted by these schemes.
- Deceptive Auto Financing: Scammers may lure military personnel with promises of special ﬁnancing deals but charge excessive interest rates, hidden fees, or unfavorable loan terms that can lead to ﬁnancial
- Lemon Cars: Unscrupulous sellers may knowingly sell defective vehicles to servicemembers, concealing mechanical issues or damage that can result in costly repairs or safety
Tips for Identifying and Avoiding Vehicle Fraud Scams:
- Inspect the Vehicle: Have a trusted mechanic perform a pre-purchase inspection to identify potential issues or signs of fraud, such as odometer tampering or undisclosed
- Verify the Vehicle’s History: Obtain a vehicle history report from a reputable provider, such as CARFAX or AutoCheck, to review the vehicle’s title, accident history, and previous
- Understand Financing Terms: Read the loan agreement carefully, ensuring you understand the interest rate, fees, and repayment Seek clariﬁcation or consult a ﬁnancial advisor if needed.
- Know Your Rights: Familiarize yourself with state and federal lemon laws, which provide protections for consumers who purchase defective Military
personnel should also be aware of the Servicemembers Civil Relief Act (SCRA), which offers additional protections related to auto loans and leases.
- Be Wary of High-Pressure Sales Tactics: Don’t let a seller pressure you into making a hasty Take the time to research and consider the purchase thoroughly.
Online and Romance Scams Affecting Military Consumers
The digital age has provided scammers new ways to target military personnel through online and romance scams. These fraudsters prey on the emotions and trust of servicemembers and their families, leading to ﬁnancial losses and emotional distress. In this section, we’ll discuss examples of online and romance scams affecting military consumers and provide tips for recognizing and protecting against them.
Examples of Online and Romance Scams:
- Catﬁshing: Scammers create fake proﬁles on social media and dating platforms, often using stolen photos and fabricated personal They establish
relationships with military personnel, eventually asking for money or sensitive information.
- Military Impersonation: Fraudsters impersonate military personnel on social media or dating sites to gain trust and credibility, exploiting many people’s respect and admiration for the military. They may ask for money, claiming ﬁnancial hardship or a need for emergency
- Sweetheart Swindles: Scammers establish relationships with servicemembers or their families, gaining their trust and affection before asking for money or ﬁnancial assistance, often for fabricated emergencies or personal
Tips for Recognizing and Protecting Against Online and Romance Scams:
- Be Cautious with Personal Information: Avoid sharing sensitive personal or ﬁnancial information with people you’ve only met Be cautious about posting details that could be used to steal your identity or impersonate you.
- Verify Online Identities: Use tools like reverse image searches to check if a
person’s photos are genuine or stolen from other sources. Be wary of proﬁles with limited information, few connections, or a sudden inﬂux of friend requests.
- Look for Red Flags: Be suspicious of individuals who profess strong feelings quickly, avoid meeting in person, or have frequent personal crises that require ﬁnancial Watch for inconsistencies in their stories or requests for money.
- Report Suspected Scams: If you suspect a romance or online scam, report it to
the platform where you encountered the scammer, as well as to the Federal Trade Commission (FTC) and your military chain of command.
- Trust Your Instincts: If something feels off or too good to be true, trust your instincts and proceed with
Legal Protections, Resources, and Support for Military Consumers Targeted by Scams
Military personnel and their families have access to various legal protections, resources, and support to help them combat and recover from scams. In this section, we’ll discuss the Servicemembers Civil Relief Act (SCRA), the Military Lending Act (MLA), and
organizations like the Armed Forces Legal Assistance Program (AFLAP) and the
Consumer Financial Protection Bureau’s (CFPB) Oﬃce of Servicemember Affairs. We’ll also explain how military personnel can report scams and seek help if victimized.
- Servicemembers Civil Relief Act (SCRA): The SCRA provides numerous ﬁnancial and legal protections to active-duty military personnel, reservists, and members of the National These protections include reduced interest rates on
pre-service debts, protection from eviction, and the ability to terminate certain contracts, such as leases or phone plans, without penalty.
- Military Lending Act (MLA): The MLA limits the annual percentage rate (APR) on consumer credit products, such as payday loans, vehicle title loans, and tax
refund anticipation loans, to 36% for active-duty servicemembers and their dependents. It also prohibits mandatory arbitration clauses and certain fees.
- Armed Forces Legal Assistance Program (AFLAP): AFLAP offers free legal assistance to eligible military personnel and their Services include advice and representation on consumer issues, such as debt collection,
predatory lending, and identity theft. To access AFLAP services, contact the nearest military legal assistance oﬃce.
- Consumer Financial Protection Bureau’s Oﬃce of Servicemember Affairs: This oﬃce provides resources and support to military consumers, helping them navigate ﬁnancial challenges and resolve consumer They work to
ensure that servicemembers and their families receive the ﬁnancial protections they are entitled to under federal law.
Reporting Scams and Seeking Help:
- Report Scams: Military personnel should report scams to their chain of command, local law enforcement, and the Federal Trade Commission (FTC).
They can also submit complaints to the CFPB if they have issues with ﬁnancial products or services.
- Contact Military Legal Assistance: Servicemembers and their families can seek help from their nearest military legal assistance oﬃce to address consumer issues and receive guidance on their rights and
- Reach Out to Nonproﬁt Organizations: Numerous nonproﬁt organizations, such as the Better Business Bureau’s Military Line and the National Military Family Association, offer resources and support to military families dealing with consumer issues and
California’s Lemon Law Exception for Members of the Military
In addition to the federal protections available to military consumers, some states, such as California, have implemented speciﬁc provisions in their lemon laws to accommodate the unique needs of servicemembers. California’s Song-Beverly
Consumer Warranty Act, commonly known as the California Lemon Law, provides an exception for members of the military who are stationed in or are residents of
Under this exception, even if a servicemember purchased or leased their vehicle in another state, they may still be eligible for protection under California’s Lemon Law as long as they are stationed in or are a resident of California at the time of their claim.
This accommodation recognizes the frequent relocations that military personnel may experience. It ensures that servicemembers have access to the legal protections they deserve, regardless of where they purchased or leased their vehicle.
It is crucial for military consumers to be aware of these state-speciﬁc provisions and consult with a knowledgeable attorney if they believe they have a lemon law claim. By understanding and utilizing these additional protections, servicemembers can further
safeguard their ﬁnancial well-being and ensure that they receive fair treatment in the event of a vehicle defect.
Scams targeting military consumers pose a threat to their ﬁnancial well-being and morale. Being vigilant and informed about common scams is crucial, along with using available resources and protections. Seek help and report scams without shame. The military community and organizations are ready to provide assistance. By staying
proactive, the military community can successfully navigate these challenges and focus on its mission of defending the nation.