According to the Federal Trade Commission, veterans lost approximately $60 million to fraud in 2020. Active-duty military personnel and their spouses and dependents also suffered big financial losses to fraud last year. In fact, in 2020, military consumers lost more than the general public to fraud — a median $600 compared to $311 for nonmilitary consumers. Here is what you and military friends and family need to know.
Beware of Imposters
The greatest fraud threat to this group is ‘imposter’ fraud. In this scheme, a criminal calls, emails, or texts potential victims and pretends to be working for the Veterans Administration (VA) or another government agency. Perpetrators may claim they need personal information, such as Social Security or bank account numbers, to authorize the release of benefits. Instead, they use that data to commit identity theft.
In a variation of this scam, perpetrators pose as financial advisors who convince vets to exchange their pensions for up-front cash payouts. In most cases, the payouts are worth less than the pensions. In addition, fraudulent advisors may tout special benefits programs that can only be accessed by paying a fee. After paying, the fraud targets learn the programs do not exist.
Unfortunately, many other types of fraud focus on vets and active-duty members, including fake job recruiting, loan, tax, and charity schemes. One particularly vicious scam targets family members of deployed military personnel. Criminals claim the military member has been injured or is stranded and that the family must wire money.
If you receive a communication from someone claiming to be a government official, offer to contact him or her at the agency’s official phone number. Do not provide any information about yourself until you have independently confirmed the person’s identity.
- Never give anyone Social Security, bank account, or credit card numbers over the phone or in response to an electronic communication. Legitimate representatives from, for example, the VA, IRS, or state unemployment agencies, will not ask for them.
- Do not click on links or download attachments contained in suspicious emails. Visit sites by typing their URLs directly into your browser.
- Regularly monitor your credit reports for unusual activity and investigate sudden drops in your credit score.
- Be wary of anyone claiming you must ‘act fast’ to respond to an offer. Take time to confirm that individuals, programs, and products are legitimate before handing over any money. Along the same lines, only work with financial advisors you know and trust.
Military personnel, veterans, and their families face a myriad of fraud risks. Be skeptical when reviewing claims, offers, or information requests that are not delivered through official channels. Contact us with questions.