Unfortunately, Veterans are often targets for a wide variety of scams. Being able to identify a potential scam is vital in protecting oneself from a wide variety of risks including identity theft, loss of assets or income, or even the loss of a home. Below are three of the common scams that often target Veterans as well as the possible risks and damages involved.
Pension Advance Scam
With this scam, the Veteran is asked to exchange his or her monthly pension for a one-time lump sum of money. Interest rates on this lump sum can be extremely high, even over one hundred percent. Furthermore, the exchange may end up being less than the amount the veteran’s pension would have added up to over the years. This advance also requires strict budgeting so that the Veteran doesn’t run out of money. In an emergency situation this advancement may seem like the only option, but it is beneficial to discuss other alternatives with a financial advisor or research other potential options before making a decision.
VA pension is a benefit that many Veterans depend on for monthly income. However, when a Veteran gets in a bind, the car breaks down or the air conditioner breaks, for example, this scam can seem extremely attractive. Considering how a pension advance will affect future income is a must before committing to the advance.
Like many phone call scams, the main goal of this scam is to retrieve personal information. Here, the scammer calls the Veteran and states that he or she works for the VA and needs to update the Veteran’s information within the VA’s system. Then, the scammer asks the Veteran for sensitive personal information such as social security numbers or banking information. From there, the scammer can use that information to commit identity theft or drain the Veteran’s bank accounts. The VA will never ask for a Veteran’s personal information over the phone. If someone calls acting as the VA and asks for this kind of information please report the incident to the VA.
Phishing scams have been going on for quite some time. For Veterans of a younger generation, like Millennials, this scam may be easy to catch as the younger generation is accustomed to technology and the frequency of these types of calls. However, for older Veterans, such as Vietnam Veterans, this may not seem like a scam at all. Widespread education on the subject enables those that understand to realize the importance of teaching others while also hopefully reaching those that may not understand.
Most likely the most notorious scams aimed at veterans are those involving mortgages. These scams can promise special deals such as extremely low interest rates or “no-payment” reverse mortgages to veterans. These advertisements can be very misleading as the fine print may dramatically increase interest rates after a short period of time. Likewise, a no-payment reverse mortgage still requires the homeowner to pay taxes and insurance on the property, and if these amounts are not paid, the homeowner is considered to be in default, risking a loss of the home. Many of these scammers often use logos that look very similar to those used by the VA in their logos. However, the VA does not advertise the loans they offer. It is vital to seek outside advice before entering into one of these mortgages.
As technology advances more and more scams are going to present themselves. It is unfortunate that many of these scams target those that have sacrificed for and served our country. Seeking further education on new scams and seeking advice on investment opportunities or loan options and always refraining from giving out personal advice over the phone is the best way to combat scams and the risks that they impose.
Below are links to website’s discussing common scams that Veterans run into:
Scam Alert: Top Five Veteran Swindles