Cases of fraud and identity theft that target both active and retired military personnel have climbed to unprecedented levels over the last year. How can we protect our service members?
Last year there were 65,576 reports of military-related fraud and 56,451 of identity theft with a median loss of $600 per person, according to recent statistics from the U.S. Federal Trade Commission (FTC).
Shockingly, government benefits fraud, such as unemployment fraud, went up 1,455% last year, compared to the previous year. Indeed, now more than ever it is imperative that military personnel safeguard their money, personal information, financial records, and reputation.
So, how can active and former military members help prevent this type of crime? Report it and be proactive.
There is often a hesitation to ask for help in military circles, says Carol Kando-Pineda, an attorney with the FTC’s Office of Consumer and Business Education. “Our military personnel are the people who protect us, and they are used to being in control. Sometimes they are hesitant to report identity theft because they are apprehensive of what their commander will think.” She always advises members and their families to tell their commanders immediately before a scam harms their credit and possibly their security clearance.
Why scammers target active & retired military
There are many reasons scammers target military members, with perhaps the most ubiquitous reason being service members’ guaranteed and steady income. “They are always going to attract scammers if they know there is a paycheck from Uncle Sam,” Kando-Pineda explains.
Gregory Riley, a fraud analyst at Pondera Solutions (part of Thomson Reuters) and a retired military veteran, says that another risk factor is age. Riley joined the military as a fresh-faced, 17-year-old with very little financial savvy. “If we look at the demographics of the military, a large majority are very young individuals, in their late teens and early twenties,” he says. “Younger people have a misconception that they’re bulletproof because they’re in the military. They don’t think of themselves as vulnerable.”
Kando-Pineda agrees, adding that many service members are right out of high school and in their first job. Often they have little financial experience and are likely away from home for the first time.
Another big reason military and their families may be susceptible to fraud is that they are frequently relocating. Military families still move every two to three years, she says. That means their information is being shared around a lot more, and they may encounter scammers more frequently because of that. Also, military spouses can fall prey to employment scams because they often are looking for flexible, work-from-home jobs.
Imposter scams at a high point
Imposter scams are the most prevalent type of fraud being reported by military members. These scams involve persons who claim to be someone a military member might trust; however, they are actually criminal actors hoping to get money or personal identifying information from the military member.
Imposter scams take advantage of whatever situation happens to be percolating at the time or one that has a lot of emotion attached to it, Kando-Pineda says. For example, one brazen scam currently making the rounds is attempting to target the government’s $9000 payment to families to cover COVID-19 burial expenses. Fraudsters will text or call people with offers of help with setting up burial expenses for a fee. “It is the lowest of the low,” she says, warning that online romance scams, which shot up in 2020 due to the pandemic, are prevalent as well. Romance scamsters often are in for the long haul, engaging victims in conversation and bringing their defenses down until the scammer can make the real pitch. “They may say, ‘I need you to send me $5,000 for my daughter’s surgery’ or ‘I finally have my leave lined up, and I want to visit you. Send me the money for the plane ticket,’” Kando-Pineda notes, again warning that other frauds, such as charity fraud and Internal Revenue Service (IRS) imposter fraud, also target service personnel.
Tips to protect military families
There are several proactive measures military personnel can take to protect themselves from fraud and identity theft, according to Kando-Pineda, including:
Engage financial managers — Service members have personal financial managers at their disposal who can help military members navigate through their finances and assist in safeguarding their money, financial and account information, and reputation. This is extremely important because a person’s negative financial situation can impact their security clearance. Pondera’s Riley says that there are many command representatives who work with service members who are experiencing financial difficulty, but the service member must first reach out and want help. They can’t let the perceived reputational risk get in the way, he adds.
Check credit reports frequently — Military members should check their credit report every few months, Kando-Pineda says. In fact, during the pandemic, all consumers are entitled to a free credit report every single week from the three credit reporting bureaus. This way, military members can check if someone has illegally applied for government benefits in their name or opened any line of credit. If an active member is deploying, put an active duty alert on your credit report. This requires creditors to verify your identity before giving credit in your name.
Free electronic credit monitoring — Service members recently were given the right to free electronic credit monitoring — take advantage of it, Kando-Pineda advises. In 2015, hackers stole personnel files of millions of current and former federal employees in what became known as the Office of Personnel Management data breach. The breach exposed the personal identifying information of millions of active-duty service members and veterans, especially those who went through background investigations for a security clearance.