Scams. It seems to be a consistent problem that affects military members more than others, but experts say there is much that service members can do to prevent becoming victims.
In a report titled "In Harms Way," the National Consumer Law Center (NCLC) has analyzed the problem and has come up with some solutions.
The report concludes that military members have and will be targets, due to predictable paycheck dates and job security. It also cited the military culture that expects its members to lead orderly, financially stable lives.
Ironically, it is often attempts to keep their finances in order that lead members to make poor decisions and spiral into major financial difficulties. And once an individual gets that far in debt, it is no longer just the individuals problem; it becomes the commands problem, as well.
Some of the most common scams, while not technically illegal, can still separate military members from their hard earned cash. One of the most common is the post-dated check. This takes the form of a loan in the amount of ones paycheck.
In order to get this money, a service member must give the lender a post-dated check that includes the amount of the loan plus interest at a rate of about 300 percent.
While the paycheck advance is most common, the NCLC found other scams, including loans for car titles and the purchase of nearly worthless catalog coupons. These businesses are often located right outside the gates of military bases.
They hire former military personnel, who are able to relate to the military members they prey on. These businesses all find ways around the on-base solicitation rules by advertising in the military Times magazines found in almost every Exchange facility.
According to the NCLC, many members mistakenly assume that these are official publications, but they are not. They are civilian enterprise newspapers, with absolutely no endorsement from the DoD.
According to Lt. Scott Simpson, a legal assistance attorney with Naval Legal Service Office Europe and Southwest Asia, scams target all military members, regardless of rank.
He stressed that the Internet is a popular source for many of todays scams. Simpson recalls one service member who spent $25,000 on an Internet-based company to arrange a marriage for him with a woman from Russia.
He worked two part time jobs to save up the money to bring his new bride to America. When this young lady arrived, in a period of two months, she proceeded to max out his credit cards, get pregnant by some other guy, and then vanished into the night -- never to be heard from again.
Scams that target the military dont stop when the member retires. Another popular scam includes the selling of veterans retirement benefits, which are usually at horrible rates for the borrower.
More troubling is the fact that, according to the NCLC, such reassignment of benefits is illegal.
What makes these situations all the more tragic is the fact that there are numerous legitimate service relief societies, which not only offer financial management training, but also give out grants and no-interest loans for people with money problems.
In fact, the NCLC has found that the claims of bankruptcy and complaints against the scam companies fell by 80 percent when the local relief society chapter started running advertisements countering the unscrupulous loan agencies.
According to Simpson, an international effort to decrease the likelihood of becoming a scam victim includes an information sharing campaign, as well as international cross-border agreements with the U.S., Canada, U.K. and Australian law enforcement.
But the prevalence of Internet scams (four of the top five scams targeted by U.S. and U.K. law enforcement were Internet-based) make international borders less of a barrier.
Taking shortcuts to acquire money usually leads to long-term problems that keep the individual permanently in debt, or spending more money than they should.
The best defense against a scam is to recognize that if something sounds wrong, or just too easy, it probably is.