Military Consumer Protection Resource Page
Military members, veterans and their families are often targeted by dishonest businesses. Scams and deceptive tactics in consumer transactions can hurt a military member or veteran’s personal finances, damage their credit, threaten their security clearance or prevent them from getting a job. The best way to prevent being scammed is to be an educated consumer and to protect your personal information. Please click on the links below for more information about consumer and financial topics that can affect active and former service members.
Avoid Predatory Loans
Many sources make money available to loan — most legitimate, and a few that are out to prolong your debt just to take more of your money. Finance companies usually charge much higher rates for loans (especially auto and home equity) to people with a low credit rating. Watch out for high-interest loans and those requiring an up-front payment from you, a sure sign of a scam. Be sure you have read and understand the terms before you sign a loan contract of any kind.
Outside of a home, buying a motor vehicle is the biggest purchase you will probably make. Therefore, it’s important that you’re prepared so you can choose a reliable vehicle, negotiate favorable terms, and avoid deceptive tactics and scams.
There are many legitimate charities that support veterans and family members of active duty service members. However, some charities are bogus organizations that are raising money strictly to line the pockets of the scammers who run them. These con artists hope that your sympathy and solidarity for veterans and military families will engender your trust. So you should always check out an organization thoroughly before you make a donation.
If you have gotten behind on your payments, you may receive calls from debt collectors. However, even if you legitimately owe the debt, there are certain things that third-party debt collectors can and cannot do. Find out what your rights are and what to do if you are being harassed by a debt collector.
State and federal laws provide certain protections to active duty service members related to terminating a residential rental agreement, cell phone contract, automobile lease; capping interest rates on most pre-existing debts; and eviction and foreclosure prevention.
If you’re an active duty member of the armed forces or are on active Guard or Reserve duty, the Military Lending Act says that you can’t be charged an interest rate higher than 36% on some types of consumer loans, such as, car title loans and tax refund anticipation loans. It also protects your spouse and certain dependents.
Home Rental Scams
Since active duty service members often have to deal with frequent relocations, they are particular vulnerable to home rental scams. In trying to line up a rental home or apartment before your move, you may find yourself relying on online ads on Craigslist on other websites. So it’s important to be aware that some of these listings are bogus and to know how to avoid being scammed. In a typical rental scam, the scammer take photos and other information from legitimate online rental ads and then puts his or her contact information. Scammers typically ask you to send money upfront, usually via wire transfer, in exchange for a key to the residence. Victims of these types of scams show up at their new home only to find it already occupied. And of course, they cannot get their money back or even make contact with the person who posed as the landlord.
To avoid scams such as these, avoid paying money until the lease has been signed. Do not give out your banking information and be especially wary of paying via wire transfer, since money you wire is nearly impossible to recover. Other red flags of a scam are if the person advertising the apartment is in another country or is not reachable by phone. If at all possible, don’t enter into a contract or pay any money unless you have walked through the residence in person. If that isn’t feasible, see if you can find a friend or real estate agent in the area who would be willing to do this on your behalf.
Identity theft is a serious crime that can have horrible consequences on your finances, credit history, criminal record and reputation. As military personnel, you are especially at risk, since you may not have regular or easy access to mail and may also be unable to check your credit score often to find out about potential problems. Find out how to protect yourself and what to do if you’ve been the victim of identity theft.
If you have experienced continuing problems with a new motor vehicle that you purchased or leased in Georgia, the Lemon Law provides a self-help process that can help you get your defective vehicle repaired, replaced or refunded.
Rent-To-Own Furniture and Merchandise
Rent-to-own stores allow consumers to make monthly rental payments on furniture or household items, with the option to buy the items after a certain length of time. The rental period can be as short as a week or month or can be extended. This is often appealing to active service members since they may have to re-locate frequently and can be deployed with little notice. This also may seem like a good option for service members who do not have credit cards or a good credit history. However, consumers should be forewarned that sometimes these agreements are not a good deal at all. The prices of these items are sometimes inflated two to three times above what the same item costs at a regular retailer. In that case, the consumer ends up paying more money to rent the item than if he or she had simply purchased it outright from a store. If you are considering renting furniture or other merchandise, make sure you shop around and compare the cost to what other retailers are charging. Read the contract thoroughly and make sure you understand the interest and fees you will be charged. Then do the math and see if it will really be cheaper in the long run to rent the item or not.
Veterans and their families are a target for some dishonest advisers who are claiming to offer free help with paperwork for pension claims. The scheme involves attorneys, financial planners, and insurance agents trying to persuade veterans over 65 to make decisions about their pensions without giving them the whole truth about the long-term consequences. Specifically, these unscrupulous brokers try to convince veterans to transfer their assets to a trust or to invest in insurance products so they can qualify for Aid and Attendance benefits. What they don’t reveal is that these transactions could mean that the veteran loses eligibility for Medicaid services or loses the use of their money for a long time. Adding insult to injury, the advisers are charging fees that range from hundreds to thousands of dollars for their services. Your best defense against someone who wants to poach your pension to get you a better deal? A firm “no, thanks.”
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