COVER STORY
PREDATORY LENDING, MILITARY TARGETS
Service members, Veterans, and military fami- lies face unique challenges when it comes to matters of personal and family fi nance. Specifi c challenges faced: • They are attractive targets for both good and bad lenders. Many lenders know the UCMJ requires service members to maintain good fi nances.
• They are easy to fi nd, so lenders are confi - dent they can collect debts they owe.
• Their military pay represents a steady income that could be garnished.
• Military families often start young, leading to big money management decisions by fi rst-time decision-makers.
Service members also face unique risks: • Deployments, change of duty stations, and emergencies lead to unplanned and unique fi nancial diffi culties without ade- quate resources to resolve them.
• Marketers often try to exploit service mem- bers’ loyalty to the military by tying pitches for loans and other products to military ser- vice, a strategy called “affi nity marketing.”
• Frequent relocation can mean unforeseen expenses and a lack of familiarity with the local environment.
For more information, visit the CFPB website dedicated to issues unique to service members, Veterans, and their families at
www.consumerfinance.gov/ servicemembers.
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www.hqafsa.org
garnished, and that the force is relatively young and perhaps less experienced at managing money.” As evidence of this practice, she points out that if you
enter “military loan” into a search engine, more than 80 million hits come up—many for lenders off ering up to triple- digit interest rates, while others are outright scams asking for money upfront to secure a loan. Frequent deployments and moves also can make handling fi nancial issues challeng- ing for military families. Petraeus cites countless times when military members pay a bill, deploy, and a small amount is billed the next month, unbeknownst to the military member.
“T e lender will say, ‘Well, we couldn’t fi nd them’, and it’s sent to collections, leaving a mess for the military member to clean up when he or she returns, or it becomes a distraction while deployed,” she says. T ese issues don’t just impact wallets; they impact lives
as well. Petraeus points out that fi nancial problems are wide- spread and all too common in the military, in part because so many of the social problems seen in the military and Veterans
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