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hanks to everything from regular paydays to frequent moves, the country’s service members are prime targets for unscrupulous financial scammers. ¶ “Military members are popular targets for frauds of all kinds,” says John Breyault, vice president of the National Consumers League. ¶ The problem is so far-reaching that the Consumer Financial Protection Bureau recently launched a special office to help monitor the situation. ¶ Here are five of the top financial rip-offs that plagued service members during 2011.
1 usaa.com
Overcharging on Purchases A recent investigation found that a financing company associated with a national retail chain purchased electronic equipment at warehouse clubs and then charged soldiers quadruple the retail price. How? The
firm refused to accept cash and instead forced buyers to sign financing contracts filled with charges and shocking interest rates. Over the summer, however, the company agreed to settle charges filed by New York’s attorney general, releasing nearly 1,000 service members from $3.5 million of debt. Young service members are particularly vulnerable to
this tactic, says John Breyault of the National Consumers League. “Not only do they have significant amounts of cash for the first time in their lives, it’s often their first time away from home.” Recommendation: Do your homework before you buy a costly item. And if entering into a financing deal, read the fine print rather than just taking the salesperson’s word.
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