The Office of Attorney General is committed to protecting all Pennsylvania consumers from unfair business practices and scams; however military members, veterans and their families are often specifically targeted by dishonest businesses looking to exploit their patriotism, lifestyle and hard-earned benefits.
Consumer issues can hurt a military member or veteran’s personal finances, damage their credit, threaten their security clearance or prevent them from getting a job. Correcting the record can be costly and time-consuming. The best way to prevent being scammed is to be an educated consumer and to protect your personal information.
To learn more about the Bureau of Consumer Protection, click here.
Each year more than 10 million Americans have their personal information -- including name, Social Security number, or bank account or credit card numbers -- stolen. Thieves use this information to open phony credit cards, bank or utility accounts, and sometimes to use the victim's identity to secure benefits such as healthcare or government assistance. Having your ID stolen can harm your finances and credit history, damage your reputation, and prevent you from getting a job. Recovering from identity theft can be a difficult, frustrating and time-consuming process, and it costs the United States an estimated $58 billion annually.
Sadly, veterans and military members can be targets for identity thieves who want to steal their benefits or exploit elements of the military lifestyle, like frequent travel.
Have you had your identity stolen? Click here for the Federal Trade Commission’s complaint form.
Predatory lenders offer products like payday loans to customers with high fees and/or exorbitant interest rates, and aim to trap their customers in a cycle of debt. You often see these underhanded lenders outside military installations using patriotic and pro-military slogans and signs. They also use aggressive marketing techniques and online advertising. These lenders know that veterans and military families have a steady and reliable income, limited financial education and that military personnel are held to high standards for debt repayment. However, when approving a loan, these lenders disregard the amount a consumer can afford to repay, and in fact encourage them to apply for extensions or refinance with additional fees and APRs (annual percentage rates) in the triple digits.
The Department of Defense has said predatory lending undermines military readiness and harms military families.
Currently, Pennsylvania is one of 15 states with laws protecting consumers from predatory payday lending, however predatory lenders often seek to repackage their products and have them legalized. Under the federal Military Lending Act, which is enforced by the Consumer Financial Protection Bureau, and Department of Defense regulation, service members and their dependents have additional protections including that the APR cannot exceed 36 percent (including most fees and charges); lenders are prohibited from securing the loan by holding a check, car title, or obtaining access to a bank account; terms of the loan may not include mandatory arbitration or a waiver of legal rights; and a clear description of the payment obligations and other disclosures must be provided.
While access to a payday loans’ quick cash may be attractive and sometimes seem crucial to making ends meet, they should be avoided. When seeking aid, consumers should visit trusted sources, like banks and credit unions, which may offer lower interest rates or special rates for military members and veterans. There is also potential help through military aid societies.
Submit a payday loan complaint to the Consumer Financial Protection Bureau.
Easy Credit Retailers
When you need to purchase a pricey consumer item, like a computer, piece of furniture or appliance, but are short on cash, a retailer claiming guaranteed or easy credit may seem like the answer. However, these offers can have costly strings attached.
Friendly sales people offer “easy credit” and persuade consumers to make additional purchases they don’t need, charge more than the item is worth, convince military members to pay with allotment from their earnings, and charge exorbitant fees and interest, which put the consumer in a perpetual cycle of debt.
The problem is these retailers know the law very well and operate just within its boundaries, and sometimes their tactics leave little recourse for the consumer. It is best to shop around for the item to know what a fair price is. Also try to save for the purchase, but if it’s an emergency and waiting isn’t an option, getting a loan from a credit union or bank is safer and they’ll likely have a better rate so you can save money in the long-term. Don’t pay with an allotment from your military pay. Discretionary allotments were created at a time when online banking didn’t exist. Paying through an allotment limits your flexibility, your options and even some legal protections. Also ask the total price of the product you’re buying, including interest and fees for your loan, not just the monthly payment.
The best way to avoid these dishonest businesses is to be a thoughtful, informed consumer.
File a complaint with the Consumer Financial Protection Bureau.
Sadly, there are dishonest financial planners and advisors who target veterans and their families, offering assistance with filing paperwork or claim they can help veterans qualify for supplemental benefits. These advisors fail to fully explain the details or long-term consequence of their advice.
Often the planner persuades a veteran to transfer assets to a trust, or otherwise restructure their assets to qualify for Aid and Attendance (A&A) benefits; however such actions may disqualify the veteran for other benefits. The advisor earns their money by charging a fee for advice and selling an annuity or creating a trust. They’re often long gone when the veteran has a question.
To apply for A&A benefits contact an accredited Veterans Service Organization, your local county Veterans Service Office or visit the VA online benefits portal. There is no cost for forms or fees to apply.
Click here to view our Pension Poaching brochure.
Check a Charity Before You Donate
Legitimate charities need help and many aim to do great work for veterans, members of the military and their families. However, there are important things to know when determining whether a charity deserves a donation.
Know they’re legitimate.
Most charities operating in Pennsylvania are required to register with the Department of State’s Bureau of Charitable Organizations. You can check to see if a charity has complied by calling (1-800-732-0999) or checking online (www.dos.state.pa.us , click on “charities”).
Don’t be tricked by an official sounding name, or one that sounds similar to a well-known group. Many “charities” try to adopt similar names or logos to take advantage of another charity’s positive reputation or try to appear affiliated with the group.
Ask some questions.
Ask how much of your donation goes to helping people or providing services versus being spent on foundering and administrative expenses. All charities should have a printed annual report that includes this kind of information. Ask what the charity’s goals are. Does it align with your goals?
Don’t be pressured into giving.
Take time to consider your donation. Don’t be pressured by aggressive solicitors or sob stories. If a solicitor comes to your door, don’t feel obligated to let them in, and always ask for identification. If a charity calls you can ask if the solicitor is paid or a volunteer, and how much the charity receives from each dollar you donate. It is safest to mail your donation to the charity rather than over the phone or at your front door.
You don’t have to pay for unordered merchandize.
You have no obligation to pay for address labels, greeting cards or other items sent to you that you didn’t order, nor are you required to return them.
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