The Department of Defense and the Federal Trade Commission are preparing to observe the second annual Military Consumer Protection Day on July 16, 2014. The DoD will direct military families to free online consumer resources “to help them avoid scams and make informed decisions about financial products and services.”
Many lending scams target the military–many of whom have low incomes and/or live on fixed incomes–by offering loans at higher than normal interest rates. One of the top scams reported in 2011 was the Veterans Benefit Buyout Plan which offered veterans cash upfront for their military pensions. (Interest rates of more than 30 percent!) A judge ruled in favor of a group of retirees who filed a class action lawsuit, but that was just one company foiled. Advice from the DoD: It’s never a good idea to sign over your benefits in exchange for upfront cash.
