Military personnel

Scams victimize military consumers at a higher rate than average

By Randy Hutchinson

President of the BBB of the Mid-South

Reprinted from The Commercial Appeal

A new study conducted by the BBB Institute for Marketplace Trust (BBB Institute) and the Association of Military Banks of America (AMBA) found that military consumers report higher losses to scams than the general population. Military consumers include service members, military spouses and veterans.

Melissa Lanning, BBB Institute Executive Director, said, “Military consumers face unique challenges in the marketplace. From navigating Permanent Change of Station moves to family separation during deployment to transitioning to civilian life.”

Brigadier General Omuso George, US Army (Ret.), President and CEO of AMBA, said, “There are legal protections in place to support service members and their families in the marketplace, but scammers don’t care about what is legal or ethical.”

Military consumers reported a median loss of $196 to scams, significantly higher than the $130 reported by all consumers. Military consumers ages 18 - 24 reported the highest susceptibility to scams (57.7 percent) and median dollar loss ($332) of all military age groups.

The top five riskiest scams reported by military consumers were;

  • Online purchase. Scammers offer attractive online deals, but once the payment is made, no product or service is delivered or they send low-quality or counterfeit products.
  • Employment. Job applicants are led to believe they’re applying for or have just been hired for a promising new position, but instead have given their personal information via a fake application or sent money to scammers for “training” or “equipment.” In another variation, a person may be “overpaid” with a fake check and asked to send back the difference via wire, digital payment app, or another payment method.
  • Investment/cryptocurrency. Investment scams take many forms, but all prey on the desire to make money without much risk. Some scenarios include pressure to purchase, trade, or store digital assets (cryptocurrency) with fraudulent exchanges.
  • Home improvement. Door-to-door solicitors offer quick, low-cost repairs and then take payment without returning, do shoddy work, or “find” issues that dramatically raise the price. These types of schemes often occur after a natural disaster.
  • Travel/vacation/timeshare. Con artists post listings for properties that are not for rent, do not exist, or are significantly different from what’s pictured. In another variation, scammers claim to specialize in timeshare resales and promise they have buyers ready to purchase.

The highest median dollar losses were reported from scams initiated in person, by phone, and via text message. Military consumers incurred the highest losses when they were tricked into making payment via a wire transfer, check or cash.

After being targeted by a scam, 44 percent of military consumers reported losing confidence or peace of mind. Those who lost money were more likely to experience financial distress, damaged credit, strained relationships, and loss of potential earnings.

The BBB Institute and AMBA offer these tips for military consumers, and others, to avoid scams:

  • Check out businesses and websites with the BBB and online.
  • Be extremely cautious when dealing with anyone you’ve only met online and never send them money.
  • Don’t be pressured to act immediately.
  • Use secure, traceable payment methods. Being asked to pay via bank transfer, gift card, prepaid debit card, or cryptocurrency is a red flag that you’re likely dealing with a crook.
  • Don’t believe everything you see or read and beware of offers that seem too good to be true.