Like all consumers, servicemembers of the United States can fall under the sway of scammers seeking to take ’em for all they’ve got. But due to their specific circumstances they’re often the focus of a wide range of fraudulent businesses and other predatory practices.
Consumerist spoke with the Department of Justice’s Stuart F. Delery about the challenges facing servicemembers, veterans and their families and what the agency is doing to combat those insidious scammers.
National Consumer Protection Week is just wrapping up, making now a good time for Delery and his compatriots to remind servicemembers that they’re not alone when they come home from deployment. He says oftentimes servicemembers are more susceptible to fraud because they have a steady source of income, or in the case of veterans, a steady source of benefits, making them a promising target for scammers.
“Many of them are very young and relatively inexperienced in consumer affairs,” he explains to Consumerist. “For many, it’s their first real job with a steady paycheck, and they move frequently so they may not know in a new community which businesses to avoid.”
Add to that the stress of moving around or potential deployments, and they can feel pressured to get their personal affairs in order quickly. There’s an additional pressure on servicemembers that ordinary consumers don’t have to deal with — military members can face adverse action under the Uniformed Code of Military Justice for failing to pay a debt.
“That can make them, in some case, hesitant to challenge the debt or to question the poor business practice, or seek assistance from their chain of command when they may feel they’ve been taken advantage of,” Delery says. “And scam artists know that.”
Some common problems include those anyone could face: predatory loans, auto loans with hidden terms or fees, fraudulent or abusive debt collection and work-at home-scams targeting servicemember spouses especially.
There are also scams specifically aimed at servicemembers, explains Delery: people trying to get them to pay for assistance in getting benefits they’re already entitled to, or pushing hefty fees for life insurance when they have access to government subsidized loans. For-profit schools also go after servicemembers, claiming they’re accredited when they’re not and using other deceptive recruiting policies.
One of the biggest problems facing Delery and his team in the DOJ is trying to nail down exactly how many people are affected by such scams — they rely extensively on complaints received through the Federal Trade Commission’s site as well as the Consumer Financial Protection Bureau‘s reporting mechanism. He says while they’ve received thousands of complaints from servicemembers that way, they fear there are plenty more out there.
“People may not realize that what has happened to them is actually illegal or maybe feel embarrassed that they’ve been taken advantage of,” he says. “So while we have thousands of reports in these areas, we feel that that doesn’t fully reflect the scope of the problem.”
The only enforcement they can do depends on if there’s a problem reported, Delery clarifies, urging servicemembers and their families to come forward with any complaints.
Because the DOJ is restricted in such a way, Delery says education and outreach to the military will make all the difference. They’ve worked up a series of toolkits for U.S. Attorneys, another for the states’ attorneys general and another for JAG lawyers.
“We agree that we can’t enforce or prosecute our way out of this problem,” he says. “That’s why we need to try through education and outreach and through enforcement, to try to avoid service members become victims in the first place.”
As such, servicemembers can check out this recent op-ed by Delery, published in the Stars And Stripes, a newspaper for the military, which outlines a number of flags servicemembers can use to identify when they could be in the sights of a scammer.
Tied in to these kinds of scams are the challenges faced by servicemembers who have not been provided with mortgage protection rights guaranteed to them under the Servicemember Civil Relief Act. Big banks and regulators seem to be having trouble complying with the SCRA, as evidenced in a recent report that banks wrongly foreclosed on 700 more servicemembers than previously thought.
Delery says his group is working closely on this issue with the others in the DOJ to implement a “robust program directed at protecting the rights of servicemembers.”
The driving force for the DOJ and Delery himself in trying to fight fraud committed against servicemembers is a clear one, he says.
“Servicemembers and veterans have sacrificed so much to protect the country, we feel in civilian law enforcement where we have tools that can protect them, it’s our obligation to use them as aggressively as we can,” he explains. “It really becomes a readiness issue for the servicemembers because we want them to be able to focus on their work of protecting the nation and not to have to deal with these financial issues that can arise.”
For more online resources, Delery points to the following as good references for servicemembers to stay abreast of consumer fraud issues: