Avoiding Scams as a Military Member or Veteran

News headlines seemed to announce unrelenting increases in scams in recent years, and the 5.2 million identity theft and fraud reports submitted in 2022 grew to 5.4 million in 2023. Unfortunately, members of the military community are prominent targets for scammers. Military families and veterans were scammed out of $477 million in 2023, up $63 million from the previous year according to the Federal Trade Commission (FTC). You are not just more likely to be preyed upon if you are connected to the military, but you might also lose more money overall than civilian victims. Individual American scam victims lost a median of $500 to fraudulent activity last year, while active-duty military members lost $750, and retirees and veterans lost $577.

Common types of military scams

So how do thieves obtain information in the first place?

Scammers might target military personnel through a number of tactics, but there are two types of scams that service members and veterans should be particularly aware of: affinity fraud and VA benefits fraud.

What is affinity fraud?

Affinity fraud is a type of scam in which members of an identifiable group – in this case, the military community – are targeted. By pretending to be a member of this group, a fraudster uses social engineering, or the art of exploiting human psychology, rather than technical hacking skills to take advantage of the trust that is inherent within the group. A scammer may attempt to gain your trust by impersonating a fellow veteran or by claiming they work for an organization that supports the military in some capacity. Some of the most common types of affinity fraud include: 

• Deployment scams - A fraudster claims that he or she is being deployed and needs to sell an expensive item quickly at a significant discount. 
• Rental or real estate scams - A fraudster promises veteran discounts on rental or real estate investments.
• Phishing scams - A fraudster contacts a veteran or service member claiming to be with the U.S. Department of Veterans Affairs (VA), often to solicit personal information.
• Military romance scams – A fraudster, sometimes using a stolen identity from a real veteran, poses as a service member or veteran using a fake profile on dating sites and social media. The scammers often target victims (both military and civilians) who show online support for the military and solicit money, gift cards or sensitive information.

How can you prevent affinity fraud?

To prevent affinity fraud, remember to never send a wire transfer for any purchase. Always research property or management companies thoroughly and know that the VA will never ask for sensitive, personal information by phone, email or text message. And be skeptical about online romantic connections, particularly when financial gifts are requested.

What is VA benefits fraud?

VA benefits fraud, sometimes called VA disability fraud, occurs when a scammer manipulates or gains access to a military member or veteran and attempts to defraud victims with false claims related to VA benefits. Some of the most common types of VA benefits fraud include:

• Financial or investment agency scams - A fraudster attempts to charge for military records.
• Investment or pension scams - A fraudster claims that a veteran is entitled to additional benefits that can be secured by reviewing the veteran’s investment portfolio.
• Buyout scams - A fraudster claims to give cash up front for the veteran’s future pension or disability payments.
• VA disability claim scams - A fraudster seeks payment to assist veterans with filling disability benefit claim forms to the VA.

How can you prevent VA benefits fraud?

To protect yourself against these situations, remember that your military records are already available for free through your local VA office. Always check the credentials of investment advisors through your state’s regulatory office, and only use DAV and VA-accredited representatives when dealing with VA benefits. Remember that veterans should never pay to file initial VA disability benefits claims.

Why veterans are often targets of financial scams

One reason is guaranteed income. Scammers are aware that military personnel receive a steady monthly income and veterans may receive a government pension. When timing their attacks, fraudsters often solicit knowing that the victim recently received or will soon receive a guaranteed payment. Because it is well known that veterans are eligible for the G.I. Bill, fraudsters may also try to prey on victims by using education-based scams.

Scammers may also target military families and veterans simply because of their association with the armed forces. They might try to lead victims into a fraudulent arrangement by pretending to be or work with veterans.

Veterans are also considered potential prey for identity thieves because veteran data has been available for purchase on the dark web since 2014 when the Office of Personnel Management (OPM) was hacked and the social security numbers and security clearance information of 21.5 million individuals was exposed. The hackers also stole 5.6 million sets of fingerprints.

How to prevent military scams

Although the federal government is taking steps to help curb veteran identity theft, the best way to prevent becoming a victim of fraud is by taking action yourself. Here are some tips for preventing fraud as a service member or veteran:

• Set up an active duty alert before you deploy - To set up an alert, contact one of the credit bureaus and request an active duty alert. That bureau will contact the others. By setting up this alert, businesses will have to take extra steps before granting credit in your name and you will be taken off the marketing list for prescreened credit cards for two years, unless you request otherwise. The alert lasts one year unless you ask for it to be removed sooner, and it can be renewed if your deployment lasts longer.
• Check your credit report regularly - One of the simplest ways to stop fraud is to be aware of everything that hits your credit report as soon as it happens. You can visit www.annualcreditreport.com to check your reports for free. You’re entitled to one free copy every 12 months. Don’t be fooled by other sites. This is the only federally authorized website for free credit reports.
• Set up alerts with your bank - Many financial institutions offer alerts that can help protect you if suspicious activity occurs with your account, such as notifications when your balance goes below a certain level or when a charge on your credit card exceeds a certain amount.
• Shop safely - If a web address begins with “https” rather than “http,” it is generally secure. Avoid financial transactions on “http” sites.
• Set up an initial fraud alert - If you are concerned about identity theft after an incident like losing your wallet, it is smart to sign up for an initial fraud alert. Contact one of the three credit reporting bureaus and ask to set it up. They will contact the other two. In the meantime, it is a good idea to only carry the minimum amount of identifying information you require on you.
• Restore factory settings on devices before selling them - Remember to protect your personal information when disposing of or selling computers or other electronics. Because these devices can hold sensitive information, it is important to make sure you restore your devices to the factory settings before getting rid of them.

Although preventing identity theft and avoiding scams can seem like a lot of work, dealing with the repercussions of scams are so much more cumbersome. Be vigilant and skeptical, and always do your research before giving out personal information. At First Command, we work hard to keep your information secure. To review our privacy practices and learn more about how we keep our clients’ information safe, visit https://www.firstcommand.com/privacy-notice/online-security-notice/.