Military families often face greater financial challenges than their civilian counterparts, and those issues may be compounded when they encounter unscrupulous lenders looking to take advantage of their situations. In an effort to make sure servicemembers and their loved ones were protected, Congress passed the Military Lending Act six years ago, and this year communities around the country are recognizing the issue on July 17 as they mark Military Consumer Protection Day.
An on-going effort
While July 17 is designated as the specific day, organizers say it's part of a year-long campaign to raise awareness of the prevalence of con-artists and identity thieves. Young servicemembers are often prime targets for scammers because they may be unfamiliar with the ins and out of financial protection. Last year, the Federal Trade Commission says it received approximately 62,000 complaints from servicemembers ranging from identity theft and imposter scams to lottery and sweepstakes frauds.
"Military Consumer Protection Day gives us an opportunity to focus on the servicemembers, veterans, and families who sacrifice so much for our country," said Jessica Rich, FTC's bureau of consumer protection director. "They are targets for fraud because they relocate frequently, and many are living on their own and earning a steady paycheck for the first time."
Efforts paying off
Previous programs put in place have managed to crack down considerably on the number of servicemembers who are victims of fraud. According to the Consumer Federation of America, the Military Lending Act helped reduce the number of payday loan outlets near Camp Pendleton by as much as 70 percent five years after the law was implemented. While there has certainly been progress in recent years, there is still work to be done.
Recession effects linger
The recession impacted almost everyone, including military families, and they're still feeling the impact. According to the National Military Family Association, there are several areas in particular that servicemembers and their loved ones are still dealing with. Specifically, finding a job when a spouse has to change stations is a big issue, as is selling the house they previously lived in. Underwater mortgages – a house with a purchase loan with a higher balance than its free-market value – are also weighing heavily on the financial health of military families.