Today is Military Consumer Protection Day — the start of a year-long campaign by federal agencies to help service members and their families handle their finances and protect against con artists and identity thieves.
According to the Federal Trade Commission, members of the military are ripe for attacks by scam artists.
“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,” said Jessica Rich, FTC’s Bureau of Consumer Protection Director, in a news release.
The FTC said that last year it received more than 62,200 complaints from service members — with about half of them coming from the Army. A whopping 24,800 complaints involve identity theft. Service members also frequently complained to the FTC about debt collection, impostor scams, lottery and sweepstakes scams and banks and lenders.
The government has posted financial protection materials online for the military.
The FTC recommends that service members check their credit reports annually for errors or signs that lines of credit have been opened under their names by thieves.
Consumers are entitled under federal law to a free credit report annually from the top three credit reporting agencies. You can order them online or by calling 877-322-8228.
Maryland residents are entitled to a free credit report yearly from each of the three -- Equifax, Experian and TransUnion -- under state law by contacting them separately.
The FTC notes that service members on active duty can reduce the chance of identity theft by placing an “active duty alert” on their credit report. You only have to contact one credit bureau, which is supposed to notify the others. An active duty alert lasts one year.
According to Experian, one of the major credit bureaus:
“An Active Duty Alert does not require a lender to contact you directly to get your approval before granting credit in your name, but it does enable them to take appropriate action to protect your identity. Each lender must determine what constitutes appropriate action for its particular business.
“When you add an Active Duty Alert, your name is also removed from lists for preapproved offers for two years.”
Frankly, that doesn’t sound like much protection at all — particularly given the fact that identity theft is one of the military’s biggest consumer complaint.
Service members instead should consider “freezing” their credit report for a small fee — $5 for Maryland residents. New creditors won’t be able to see your report, so they won’t allow anyone to open new lines of credit with your information. That also means you won’t be able to open new lines of credit, such as taking out a credit card or car loan, while the freeze is in place.
Experian explains how to lift the freeze to apply for credit with little risk of identity theft:
“First, you can request that the freeze be temporarily lifted. You can specify the timeframe, such as a day or week, for the freeze to remain lifted to allow for the application process to be completed. This also allows you to apply with multiple lenders if seeking the best loan or account terms. The freeze will be restored automatically at the end of the timeframe you specify.
“Another option is to request a single-use PIN that you can give only to the creditor with which you are applying for the card. Doing so allows the lender to obtain your credit report one time while still leaving your credit report frozen to all other lenders.”