Scam artists who prey on members of the military and their loved ones have no shame. But there are ways to avoid getting ripped off by these heartless crooks.
Never pay up-front to get a loan or a credit card
You may have seen advertisements promising easy access to loans, even if you have bad credit. These =advance fee= loan scams try to get you to pay for their help getting a loan, but once you pay, the loan never materializes. To steer clear of advance fee loan scams, watch out for loan brokers who promise or suggest that they can get a loan for you if you pay a fee first. In many States, it’s illegal for a loan broker to charge an advance fee to obtain a loan or a credit card for a consumer.
Legitimate lenders will not charge you money upfront. Typically, advance fee loan schemes claim that you must make the first and last monthly payments or pay five percent of the principal so that you won’t lose the loan to others who are competing for it. Don’t agree to pay anything until after the loan has closed. And steer clear of advance fee credit card offers, too. Scammers may offer credit cards with a pre-approved limit and low interest rates for an upfront fee. They’ll ask for your bank account information and so they can authorize an electronic draft to pay the fee. In most cases, they simply take money from your account and you never get a credit card.
Watch out for people who try to exploit a military connection
Scammers are always looking for ways to get a potential victim to lower their guard. Some will try to gain your trust by claiming a connection to the military. Just because a business puts a military reference or term in its name doesn’t mean it provides good service to military personnel. If someone seems to be using your shared military service to get you to purchase a product or make an investment, be wary. Don’t let anyone exploit your patriotism or cause you to set aside your healthy skepticism about spending or investing your money.
Avoid self-serving “Financial Planners”
Deployment pay… a reenlistment bonus… retirement pay. Any event that puts cash into the hands of a service man or woman represents an opportunity for an unscrupulous investment advisor. Despite recent crackdowns on companies that target members of the military for investments that carry high fees, military personnel remain at risk. Roth IRAs and the military’s Savings Deposit Program are among the safest ways to protect your hard-earned dollars.
Get insurance you need, not what someone wants to sell you
Some insurance agents try to use high-pressure tactics to maneuver military personnel into purchasing insurance they don’t need. Agents are now barred from trying to sell insurance at mandatory-attendance meetings on base, and they can’t use senior personnel to help them pitch their policies. But outside the gates, many insurance agents still try to convince service personnel to buy inappropriate insurance. Instead, max out your government-provided insurance. The Servicemember’s Group Life Insurance (SGLI) provides outstanding insurance at a great price.
DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt. Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.DMCC is located at 1330 SE 4th Ave, Suite F, Fort Lauderdale, FL 33316.