July is the month when service members recognize Military Consumer Protection Day.
While servicemembers protect the country every day, they are often more susceptible to financial exploitation and scams. So, in honor of Military Consumer Protection Day, here are some scams and unfair practices to watch out for:
There is a certain shared connection among all servicemembers. So, you're more likely to trust someone who is also a servicemembers. In an affinity scam, fraudsters use that connection to dupe victims.
In one case, a Texas man used his status as an Army Veteran to trick current and former military personnel to invest money with him. In another case, an Army Staff Sergeant ran a Ponzi scheme stealing $500,000 from nearly 100 fellow soldiers
Card Popping Scam
College students and young active duty military personnel are being targeted in card popping scams.
In these scams, the scammers, impersonating USAA officials, create false social media profiles or Instagram or Facebook, offering quick cash, scholarships, or promotions. The scam promises that victims will get a cut of a check that they must deposit into their checking account after they provide the scammers with debit card numbers, pin numbers, and login information. Scammers will then deposit fake checks, and use the victims' debit cards to withdraw large sums of money before the bank discovers the fraudulent checks.
In many cases, the victim ends up being on the hook for the fake check.
Unfair Debt Collection
In another case of unfair exploitation of service members, Freedom Stores Inc. used illegal and abusive debt-collection practices to get money from servicemembers.
Freedom Stores, Inc. is a chain of stores that services military bases throughout the United States. According to a lawsuit filed by the Consumer Financial Protection bureau, the company filed illegal lawsuits to get default judgments against consumers who did not even know they were being sued. The company also made unauthorized withdrawals from the accounts of servicemembers' friends or families to satisfy debts.
In a win for servicemembers, the company will now have to pay $2.5 million in refunds and penalties to victims.
If you have been victimized by a scam or unfair debt collection practices, consult with an experienced consumer protection attorney for help.