Military Members Protect the U.S., and We Can Help Return the Favor When it comes to Scams

By Jillian Sarmo, Investor Education and Public Affairs Coordinator ~

July is National Military Consumer Protection Month, and for anyone who has family members in the service, or who themselves served, it’s a great time for a refresher on the scams that target this population. Particularly for those who may have children or grandchildren, nieces or nephews currently in the military, it’s important to be aware of the predatory practices employed by many who wish to take advantage of our men and women in uniform.

Jillian Sarmo

Jillian Sarmo

A recent survey of military members conducted by the Financial Industry Regulatory Authority turned out some interesting statistics about today’s military members and their financial habits. To begin, millennials (born roughly between 1978 and 1994) make up 30 percent of the general U.S. population, but now make up nearly 75 percent of service members. This generation came of age during the 2008 financial crisis, which has had an effect on both their finances as well as their financial habits. Currently, about 35 percent of active duty military are carrying student loan debt. One-third have mortgages, and over half of those surveyed expressed concern over having too much debt.

Perhaps of greatest concern are the practices that many military members carrying debt fall into: 40 percent of participants in the survey reported engaging in risky credit card behaviors like paying late fees and carrying a balance, and many reported utilizing “alternative” forms of borrowing such as payday lenders. These numbers are much higher for military members than for the general population, but this is no coincidence.

According to the Colorado Attorney General’s Stop Fraud Colorado program, many payday loan operations target military members who they know may need quick access to money for moving costs, auto loans, credit cards, or general financing. These loans often carry burdensome interest rates and unreasonable fees, which sometimes violate the SCRA – known as the Service Members Civil Relief Act.

Service members with such loans are often also the targets of debt collection scammers, who are trying to collect on debts that are already paid, or that exist under a legitimate company that the scammers impersonate. Military consumers should be aware of theses scams, always verify where the call is coming from, and be extremely careful when it comes to making payments for debts or loans through wiring or money transfer services.

On the investment side, unfortunately we see all too often military members who fall victim to affinity fraud, where the brother/sisterhood in place among service members is exploited by a person who convinces others to invest money with them. Far too often these bad actors will end up losing the money entrusted to them, leaving their investors out in the cold. Caution loved ones in these types of close-knit military organizations to always check out the person and the offering before handing over any of their money, even if they feel they can trust the person unconditionally.

For more great financial literacy materials and information on scams that target to military members, check out DORA’s Military & Veterans Programs at And if you use social media, feel free to join us during July’s Twitter chat on “Scams that Target the Military,” July 11th at 1:00pm MST. Just search for #ScamChat and join in on what we hope will be an informative and fruitful conversation!