Scams: more common than you think

Soldiers Magazine, Nov, 2003

IN May 2003 the National Consumer Law Center published "In Harm's Way--At Home: Consumer Scams and the Direct Targeting of America's Military Veterans." The report states that service members are frequently faced with unfair or deceptive business practices that swindle them out of hard-earned dollars.

Drive along routes leading to military installations and you'll see numerous signs advertising quick cash, payday loans and more. These ads also appear in official and unofficial military publications. Readers often assume military officials have approved of the businesses and their claims, although official publications are required to run a statement warning readers that advertisements don't constitute endorsement of products or services by the U.S. government.

The following ad recently appeared in the Fort Belvoir, Va., "Belvoir Eagle:"

"Running short until payday? Need cash in a flash? We will hold your personal check up to 14 days for up to $550. Bad credit, no credit, no problem."

The ad neglects to state that payday loans are one of the most expensive ways of borrowing money, or that such loans are actually illegal in some states.

While Army Times is not an official publication, it does run a note encouraging readers to consider all sources, interest rates and fees for financial services advertised in its publication. The fact that many businesses use military jargon and employ ex-military members to sell their products makes it more difficult to determine whether a business is legitimate.

Low incomes and frequent deployments make soldiers attractive targets for seam artists, who know soldiers receive regular paychecks. The standard expectation for soldiers to maintain orderly lives puts them at risk because they may seek advance-fee loans or so-called "credit repair" when they're in financial straits.

What many soldiers don't realize--and what seam artists never admit--is that they can get credit at a much lower interest rate through credit unions and banks. But some soldiers fall prey to seams simply because they lack experience dealing with money.

Leaders can help protect soldiers from scam artists by identifying local businesses that have histories of crooked practices. Report such businesses to the Federal Trade Commission and make them off-limits to soldiers even if the business's practices are legal under state law.

A copy of the NCLC's "In Harm's Way--At Home: Consumer Seams and the Direct Targeting of America's Military and Veterans" is available at www.nclc.org.

Beware

Scams commonly aimed at the military include:

* Charity fraud

* Credit-repair scams

* Debt negotiations

* Employment and work-at-home schemes

* Identity theft

* Internet auctions

* Investment and financial scams

* Life-insurance fraud

* Loan scams

* Military-pension scams

* "Nigerian Letter" scams

* Pyramid schemes

* Tax scams

* Telemarketing recovery scams

* Telephone scams

* Travel scams

* Weight-loss scams

* Used-car fraud