By Amy Miller, AFC®
July is officially designated as Military Consumer Month, a time to increase awareness of the consumer protections and financial readiness resources available to our service members and their families.
While doing a little research, I learned that fraud attacks in the military community grew 69% in 2021 from the previous year, according to the FTC (Federal Trade Commission). WOW!
We all know that veterans, military members, and their families face unique financial challenges. Being unavailable during TDYs and deployments, and receiving government benefits makes them a prime target for scammers. (I can personally attest to this after spending many years working in military-affiliated banks and credit unions)
So, what are the scams out there targeting our military community? I’ve outlined the two most prevalent ones below with a few tips to protect yourself and your family.
Imposter Scams topped the list for the most frequent type of fraud affecting the military according to that same FTC report, resulting in total financial losses of around $103 million in 2021.
These types of scams occur when a thief/scammer poses as someone claiming to represent a real military or government-affiliated organization and attempts to gain your personal information. An example would be receiving a call from someone stating they are with the Defense and Finance Accounting Service (DFAS) and that there is a problem with your (or your spouse’s) pay and that they need to verify your information to process your next paycheck.
Legitimate organizations will not call and ask for this information so don’t give it out if you receive a call or email. Contact the organization directly if in doubt. Remember, websites and phone numbers can be faked and may appear to be the organization on Caller ID.
Also, DO NOT click on any links sent to you before verifying they are who they say they are and that there is a real need for the information. Not only could clicking on a link lead to you giving information to fraudsters and your identity being stolen but could also allow keystroke recording software to be downloaded to your computer. Once complete, it will record your every stroke, which they can later use to access your accounts. (I once had a client that this happened to – they were able to log on and change every one of her account passwords and transferred out thousands of dollars that were never recovered, nor were the culprits ever caught)
Identify theft is the 2nd most common type of fraud targeting our military and occurs when someone obtains and then uses your personally identifiable information (PII) for their own gain. The FTC reports that identity theft has increased significantly over the past five years and has more than doubled since 2019. The recent pandemic stimulus packages are one of the reasons we have seen an uptick in reports of thieves attempting to redeem these benefits for themselves. The increase in online shopping during the pandemic has also contributed to the increase.
In another 2020 report, the FTC states that active-duty service members are 76% more likely than civilians to report identity theft on existing accounts. Unfortunately, Identity theft for military members is most often a crime of opportunity. Service members are often faced with challenges securing personal information and documents while away on an assignment. Nearly 14% of victims report that a family member or other known individual misused their identity. (For tips on securing your information, check out my recent blog on Mildocs.org)
Signs of Identify Theft & Fraud:
Often, individuals have no idea that they are victims of fraud for quite some time. The earlier you detect it, the better and easier it will be to recover. Here are a few things (red flags) to look for that may indicate you are a victim of some type of fraud:
- New Accounts in your name – unexpected account statements or receiving cards in the mail from accounts that you have not applied for
- Being Denied Credit – this could mean that your score has dropped due to fraudulent accounts being opened using your information
- Calls from collectors – again, accounts being opened in your name
- Not receiving mail – scammers will often change addresses on account to prolong their activities
- Inaccuracies on your credit report
- Unusual charges on your existing credit cards
Tips to Avoid Fraud:
One of the best things to do is to be alert. Watching for the above signs is key. But there are a few other things that you can do regularly that are worth mentioning:
- Freeze your credit report – you can do this online at each of the Big Three’s websites (Experian, TransUnion, and Equifax)
- If active duty – place an “active duty” alert on your credit report any time you are deployed. They stay on the report for 1 year.
- Safeguard your Social Security Number – take your social security card out of your wallet and secure it in a safe place
- Use strong passwords (especially on your mobile device)
- Set up alerts with your financial institutions – most offer text or email alerts based upon balances and transactions
- Shred! Shred all your old account statements that could be used to access your accounts. Junk mail, especially preapproval offers, should also be shredded.
- Monitor all accounts – log on regularly and review your activity, statements, etc
What to do if you are a victim
You will need to take immediate action if you believe you are a victim of identity theft – the more quickly you can stop it, the better!
- Place a Fraud Alert on your credit report. You only have to contact one of the Big Three to have it placed on all 3 reports. The first one you contact is required to inform the other 2 bureaus. An initial fraud alert will stay on your report for up to 1 year unless you remove it.
- Contact your lenders, banks, and insurance companies and place alerts on those accounts as well. You may need to change account numbers and get new debit/credit cards issued.
- File a police report, you may need to file this with the credit bureaus and your other financial institutions (this is your “proof” of the crime)
- Request a credit report from each of the Big Three. As a victim of identity theft, you are entitled to a free report from each. Typically, it is recommended that you wait around a month or so after placing the freeze to do this so that it gives the report time to update and allows any other fraudulent accounts to hit the report. Once received, you will have to start working to close and dispute any that were opened fraudulently.
The best way to prevent being scammed is to be educated, prepared, and alert! I hope these tips help you prepare and protect your personal information.