Service men and women are, unfortunately, often the targets of scams. One con that preys on military members is predatory lending, when unscrupulous companies use false promises to trick borrowers into bad loans.
How the Scam Works:
You get an offer - via mail, email or even social media - touting mortgage refinancing just for members of the military or veterans. The advertisement mentions special offers, such as government programs for veterans. It may claim to be endorsed by the Department of Veterans Affairs (VA) or be part of the official Interest Rate Reduction Refinance Loan program.
You call the number provided, and the refinancing company "guarantees" you an excellent interest rate. It may sound like a great deal, but proceed with caution! This has several red flags. Real lenders never guarantee a loan rate upfront, and the VA does not contact homeowners about mortgages. This may be a case of misleading advertising, or it might also be an outright scam, where con artists charge upfront fees and then vanish with your money.
Protect Yourself From a Predatory Loan Scam:
Mortgage refinancing is not the only loan scam targeting service members, veterans, and military families. Use caution when evaluating auto loans, student loans, and short term "payday" loans.
For More Information
Visit BBB Military Line (bbb.org/military) to learn more about BBB's consumer education program specifically for military members and their families.
To report a scam, go to BBB Scam Tracker (bbb.org/scamtracker).