By Beth Kotz
According to the FTC’s Consumer Sentinel Network Data Book, almost 99,000 scam and fraud complaints were filed by military families in 2015 alone. Unfortunately, it is widely known that military families receive regular checks and benefits from the government. The military community is also known for its loyalty and willingness to help fellow members in need. This makes you a target for scammers and con artists. Use this list to learn about the most common of these schemes and ways for you and your loved ones to avoid their traps.
Imposter scams are commonly reported scam type, and work in a number of ways. Con artists pose as service members or someone calling on that person’s behalf, telling the family that they’re stuck overseas or have been badly injured. They hope that raising your emotions will cause you to send them money before you notice the red flags. Remember that the military is responsible for taking care of its members and getting them home safely. If an event does occur, you will be notified officially. On top of that, the military will never ask you for money.
Scammers also pose as employees of the VA, mainly to phish for identifying personal and financial information that will then lead to identity theft or fraud. The real VA will never ask you for sensitive information over the phone or via email. If the VA calls you, check that the number is listed on the Department of Veterans Affairs website.
Real estate scams
Real estate scammers know that military families need to move around a lot. They post attractive ads offering steep rental discounts for service members, then ask for an advance security deposit to reserve it. When you show up, the property is already occupied or non-existent. Good landlords will never ask for payment before a contract is signed, as this will make them legally vulnerable. Never send payment before first seeing the property for yourself and signing a legitimate lease.
In a related scam, a fake business may contact you and tell you they can save your home from being foreclosed, but for a fee. If you’re truly worried about your home being repossessed, call your installation’s legal office. The Servicemembers Civil Relief Act grants you special protections against foreclosure.
Charity scammers call service members or their families and elicit donations for support in the military community. They often use names similar to real charities or phrases referencing veterans, active duty members or military families. In reality, the charity doesn’t exist and your donations are going straight into the hands of con artists. Only donate to charities that you know and trust. If you get a call from a charity you’re not familiar with, check its legitimacy with Charity Navigator, an online database listing legally-recognized charitable organizations.
Pension and benefits scams
Scammers often go after a service member’s benefits or pension. They pose as brokers or financial advisors offering an advance on paychecks or pensions. These kinds of loans come laced with large fees, high interest rates, and unfair conditions. They also try to convince veterans to put their pensions in special accounts for a supposedly better return. The most common is called the “Enhanced Pension with Aid and Attendance” benefits. This actually not only locks your money in an account that generates high fees paid to the broker, it can also disqualify you from Medicaid services or make your money completely inaccessible.
You might also get a call from someone offering to help you fill out financial and government paperwork, but beware: they are only looking to steal your information. Only work with trusted and established financial institutions or CPAs. Always make sure they’re licensed in your state and that they haven’t been hit with any lawsuits or disciplinary action.
Credit card fraud
Military credit cards are also a specific target for scammers, as they often come with reduced fees or no fees at all, plus special rewards or perks tied to military service. Scammers use any method they can to phish for information, whether they’re posing as an authority to collect your personal data, or figuring out ways to infect your devices with phishing software. They use any information gathered to gain access to your credit cards, where they can make purchases in your name and, worse, open new accounts for themselves.
Never trust unsolicited phone calls, texts or emails, and never give personal information to unverified recipients. Be careful about what you download and link to from emails, social media sites or any online connection. When entering personal data into a website, double-check that the site address is correct and secure, signified by the “https” at the beginning of the address and the padlock icon in the browser status bar.
As a service member, make sure to always set your credit cards to “active duty alert” when on deployment, in order to track any unauthorized activity on your accounts.
It's an unfortunate fact that military service can sometimes mean taking extra steps to protect you and your family. We hope this article taught you more about the potential traps that scammers might be laying for you and helped you with practical solutions to avoid them. If, by some means, you or your family does fall victim to any kind of identity or financial scam, be sure to report it immediately to the Federal Trade Commission.
Beth Kotz is a contributing writer to Credit.com. She specializes in covering financial advice for female entrepreneurs, college students and recent graduates. She earned a BA in Communications and Media from DePaul University in Chicago, Illinois, where she continues to live and work.