Scams Targeting Our Armed Forces

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Military personnel and their families are attractive targets for scam artists and identity thieves.  These criminals target service members for their steady paychecks and take advantage of their non-standard work schedules, length absences from home, frequent relocations, and duty assignments to remote locations.  They also prey on veterans and their families, taking advantage of their patriotism as well as their hard-earned government benefits.  The New York Department of State’s Division of Consumer Protection has prepared this material to help arm our military with the information they need to protect themselves and their families from becoming a victim of scams.

Debt Collection Scams

The Consumer Financial Protection Bureau receives thousands of complaints each year from military consumers that deal with debt collection issues.  The most common type of debt collection scam involves continued attempts to collect a debt not owed.  Other types include false statements or misrepresentations about a debt, as well as debt collectors threating illegal action.  The collectors can be extremely aggressive and often threaten consumers with immediate arrest and/or court action that will result in fines and fees.  They may call superior officers, threaten a reduction in rank and state they are subject to a court-martial if the military consumer does not pay the debt. 

Tips to Avoid Military Debt Collection Scams:

  • Do not engage debt collection scammers. Simply hang up.

  • If the calls continue, file a complaint with the FTC and the Division of Consumer Protection.

  • If you have defaulted on a loan and are worried this could be a real attempt to collect debt, ask the collector for written verification.  Legitimate debt collectors should comply as it is required by law under the federal Fair Debt Collection Practices Act.  If they threaten or insist there is no time, it is likely a scam.

  • Avoid high pressure situations where collector’s pressure that time is running out or that they will call your superior officer to.  They are trying to instill fear to get you to send money to them.

  • Never give money or personal information to debt collectors unless you verify who they are and if the debt is legitimate.


Advance-Fee Loan Scams

Some lenders will attempt to scam borrowers into paying an amount of money to them before the loan is granted.  They take advantage of military members with bad to no credit history or would otherwise have difficulty qualifying for an affordable loan.  In addition, they may use military sounding names for their business like “Army Loans” or employ military personal to invoke greater trust with potential borrowers.  They entice potential borrowers with ads offering “guaranteed” loans or credit cards and often times will not ask the borrower for their credit history.  Banks and other legitimate lenders generally evaluate creditworthiness and confirm information before they grant credit to anyone.  Scammers will demand up-front fees to be paid to them before the loan is granted, telling borrowers it is for “insurance” or “processing” purposes.  Some will even ask for a Social Security Number for “verification” purposes without even checking credit history of the borrower.  Victims who send money or personal information to the scammer often never receive the loan.

How to Avoid Advance-Fee Loan Scams:

  • Stay away from lenders who offer loans by phone. It is illegal for companies to promise a loan or credit card over the phone and ask you to pay for it before it is delivered.

  • Avoid lenders who are not interested in your credit history and pressure you to take out a loan with them.

  • Never pay a lender who asks you to wire money to an individual.  There is little recourse if a problem should arise with the wire transactions and legitimate lenders do not pressure their customers to wire money in general.

  • Do not borrow from a lender who is not registered in you state.  Lenders are required to register in the states where they do business.  You can call the New York State Attorney General’s office or the New York Department of Financial Services to check if a lender is registered.

  • Avoid lenders that do not clearly or prominently disclose their fees.  Any up-front fee demanded by the lender before the loan in granted is a cue to walk away.

DFAS Phishing Scams

Watch out for scammers who send veterans and military spouses unsolicited emails or text messages that appear to be from the Defense Finance and Accounting Service (DFAS) or other military entity.  These phony emails attempt to mimic office entities in order to solicit money or personal information such as credit card and Social Security numbers.  Some versions advise the victim to open an attached file which can install a virus on your computer and allow the scammer to access passwords and other stored personal information.  They then use this information to commit identity theft. 

How to Avoid Phishing Scams:

  • Remember that the DFAS will not send unsolicited emails requesting your password, account numbers, or other sensitive information; and will not send email attachments that you have not specifically requested.

  • Be sure that your anti-virus and anti-phishing programs are up to date because new threats emerge constantly.

  • Don’t enter personal information over unsecure Wi-Fi networks as thieves can easily pick up your information.

  • Look out for phony websites that are trying to pose as legitimate.  Common clues to look for are word usage errors and slightly varied color schemes.

  • Make your passwords hard enough so they cannot be easily guessed and do not use the same password for everything.

  • Do not open links from a sender that you do not know.


Scams Targeting Veterans

Education Scams

The G.I. Bill is a great benefit for those who serve our country. With assistance from both the federal government and New York State’s Veterans Tuition Award (VTA) programs, NY veterans returning home from active duty have the opportunity to pursue a college degree. Unfortunately, veterans also have become the targets of education scams. Much of this fraudulent activity relies on highly questionable and even deceptive tactics used by representatives of certain for-profit institutions.

As a veteran, it is important to have all the information you need to make the best educational choice. Here are some questions to ask as you select a program:

  • What is the total cost of attendance and how will I pay?

Verify if payment is by course, semester, or program and decide on part-time or full-time study.  Be alert to all additional costs you might incur, such books, housing, or lab equipment. Check whether you are eligible for federal financial aid, which oftentimes gives better terms than private loans. Also explore all student aid programs -- grants, loans, and work-study options.  

  • Do I feel pressured to enroll?

Take your time when making your educational plans. Do not make decisions because of undue pressure from recruiters or any commitment on a whim. Some recruiters make false statements or stretch the truth to get you enrolled for classes or to take out loans. Remember, some recruiters are paid by how many students they enroll.

  • Can I transfer the credit I earn at this school to others?

If you think that you might transfer in the future, be sure to take classes that count toward your degree and can be carried over to a different institution. If you decide to attend a community college, find out about their “articulation agreements,” which essentially are formal statements describing what community college courses/credits will transfer to certain four-year institutions.

  • Will I be able to get credit for my military training?

Some, but not all, institutions of higher education, grant credit for military training. Check with the institutions for details. A great resource is the American Council on Education’s (ACE) Military Guide (

Here are some tips to help you in selecting a program:

  • Do your research. Be sure to read carefully all materials, especially the contract, before choosing a program. Make sure that you understand the specifics of enrollment and commitment policies. If you are unsure, do not be afraid to ask questions. Familiarize yourself with the institutions’ and program’s accreditation policies, graduation rates, and default rates. If the school does not provide any documents for review before you enroll, this is an automatic red flag alert.

  • Be alert to “For Military” or “Veteran Friendly” labels.  Such labels often can be helpful initially when searching for a program, but dig deeper. Look for important student services such as academic, career, and mental health support, as well as medical, disability, and housing options, for example.

  • Be wary of offers for education grants. There are many education grants that are legitimate, but scammers have seized on grants targeting veterans. If you receive a call promising a government education grant, be cautious, and most importantly do not ever share personal or confidential information over the phone.

  • Check out the Department of Education’s “College Navigator.”   It is a great resource and a smart way to start researching institutions which interest you. Here’s the link:


Veterans Affinity Fraud

Many military families and service members donate to charities and organizations for veterans.  While the vast majority of these groups do upstanding work for the nation’s veterans, some individuals take advantage of generous donors and commit fraud.  This type of fraud may be perpetrated by a corrupt agent of an otherwise legitimate organization, or in some cases by a fraudulent organization.  Some agents will claim to be veterans in order to build trust with other veterans or service members and get them to donate money.  In other cases, the agent is truly a veteran who either is being used by the organization to gather more money, or the veteran may in on the scam as well.

How to Avoid Affinity Fraud:

  • When possible, donate directly to an organization rather than via an agent.  This is safer and will avoid intermediaries who may be scam artists.

  • Donate to charities and organizations you are familiar with and are known to be reputable.  Use to investigate and evaluate charity organizations.

  • Independently verify a charitable organizations 501(c)(3) tax-exempt status.  You can find this information here:

  • Pay close attention to the names of charities and be careful of charities that have names that sound very close.  Scammers try to fool donors with charity names that sound very similar to reputable established organizations.


Veteran’s Buyout Scam

Companies offer veterans ‘advance funds’ of money that they can use now in exchange for their future benefits.  Since veterans cannot legally sign over their benefits to anyone, companies establish a joint checking account where the veteran deposits their monthly benefits check so the company can legally withdraw the veteran’s money.  These companies earn a substantial profit because they only pay veterans up to 40 cents on the dollar of what they would have received in the long run from their benefits.  In some cases, the veterans are required to sign over their property or be required to take out a life insurance policy payable to the company in case they die before they have paid back all the money they owe through their benefits checks.  If you are considering this type of loan, get the facts! Know and understand all the terms before you sign.


Scams Targeting Military Families

Some scammers target family members of service members while they are deployed.  In one type of scam, the con artists contact a military spouse, identifying themselves as a representative of the American Red Cross (“Red Cross”) or other organization, and tell the spouse that their husband or wife has been injured abroad and must be evacuated.  The caller tells the spouse that they cannot begin treatment until paperwork is completed which requires a social security number and date of birth.  The caller then uses this information to commit fraud.

How to Avoid This Type of Scam:

  • Do not give out social security numbers or other personal information over the phone to unknown individuals, or confirm that their spouse is deployed

  • If receive this type of call, it likely a scam.  The Defense Department, not the Red Cross, will contact families directly about family members’ injuries.  Typically, the American Red Cross contacts military family members or dependents directly through a commander or first sergeant, and only in response to an emergency message from a family member.

Common Scams with a Military Twist

Sweepstakes Scams: Who doesn’t want to win a prize? Unfortunately, some sweepstakes may be run by con artists who are looking to get your money and personal information.  According to the Federal Trade Commission, in 2013, complaints relating to sweepstakes and lotteries ranked 5th among military members with more than 2,800 complaints reported.  Scammers entice consumers with various prize offers and ask that they pay a fee to enter the sweepstakes and/or give them personal information.  Look out for the following warning signs for this type of scam:

  • You are required to pay to enter a sweepstakes.  Legitimate contests will not make you pay a fee or buy something in order to enter or improve your chances of winning.

  • You are told to wire money in order to insure delivery of a prize.

  • They claim to be from the government or use an official-sounding name like the “National Sweepstakes Bureau.” No government agency or legitimate sweepstakes company will contact you to ask for money so you can claim a prize.

  • You have to attend a sales meeting to win.  These kinds of ‘act now’ demands before you miss out on the prize are signs of a scam.

  • Your “notice” was mailed by bulk rate.  It is unlikely a big prize notification would be mailed by bulk rate.

Remember:  According to U.S. law, you never have to give a donation to be eligible to win a sweepstakes.  Be cautious of promises of guaranteed sweepstakes winnings in exchange for a contribution.

Romance Scams:  Looking for love online?  Be careful of online dating scams involving someone pretending to be a U.S. soldier in the military.  After a certain time period, the “Soldier” will ask for money for various things such as transportation costs, medical fees due to supposed injuries, or help with debt.  In fact, these supposed soldiers are scammers, often from foreign countries, trying to get money or personal information from their victims.  Never send money to someone you do not know or have never met.  Also, be wary of people you meet online who will not talk with you on the phone, will not meet you in person, and are super quick to declare love and their desire for marriage.