Veterans and Servicemembers: Find Help to Tackle Debt, Scams and Fraud

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Hi everybody! My name is Jessica Milcetich here with USA.gov Welcome to today's Google Hangout I’m joined by our very own Marietta Jelks, the editor in chief of the Consumer Action Handbook and Holly Petraeus, our special guest who leads the Consumer Financial Protection Buruea’s Office of Servicemember Affairs. Marietta and Holly are here today to answer questions from our servicemembers and veterans about dealing with scams, fraud, debt and other topics. Before we get started, Marietta and Holly will you take a minute to introduce yourselves? As Jess mentioned I’m the editor in chief of USA.gov’s Consumer Action Handbook, your free guide to being an informed consumer.

Whether you’re planning to buy a car, protect yourself from ID theft, file a complaint about something you bought; or you are a servicemember affected by debt collectors or fraud the Consumer Action Handbook is a free and valuable tool for you. Download or order your free copy of the Handbook at publications.usa.gov. Hi everybody, I'm Holly Petraeus here. I'm one of the assistant directors here at the Consumer Financial Protection Bureau I head their office of Service Member Affairs And my job is really to look out for service members and their families in several ways to see that they get the financial information to make better informed decisions, to monitor their complaints and respond to those complaints And also to work with other federal and state agencies on consumer protection measures for the military So kind of a wide tent that I operate under The bottom line is I'm here to see Veterans and service members and retirees families are treated fairly in their consumer financial actions Wonderful.

Thank you so much for joining us. We're so happy have you join us. So let's get started. Marietta, we know there are scammers out there who specifically go after our servicemembers and veterans. Could you tell us a little bit more about some of the common scams and frauds our military members face? Unfortunately, servicemembers are prime targets. Affinity fraud is one case where investment promoters and salesmen target servicemembers, with fake investment opportunities Another fraud that specifically affects veterans is pension poaching where unscrupulous financial advisers claim that they can help vets qualify for VA Aid and Attendance benefits Another is to their Medicaid benefits, if you move your money into a trust.

What they don’t tell you is that these actions could make you lose your eligibility for Medicaid services and you’d have to repay the Aid and Attendance benefits which is unfortunate. Those are just a couple financial things. And a lot of scams that target veterans Well thank you for that background It's a shame to hear there's so many scams aimed to service members and veterans luckily there is help available that CFPB offers.

Holly, can you tell us a little about the CFPB and what the Office of Servicemember Affairs does for servicemembers and veterans? Sure let me talk a little about the CFPB The agency was created in response to the economic meltdown back in 2008 when all those toxic mortgages written and almost took our economy off a cliff One question from the President and Congress asked who is actually looking out for consumers when all this happened and the answer was There was a bunch of financial laws on the books but the enforcement was spread out among 7 different federal agencies So they decided they would create an agency specifically to look after consumers and migrate the enforcement of those laws over to it and that is the CFPB We opened our doors in July 2011 so we're newcomers We are here to see the markets work for consumers They can see what they're getting That those who use tricks can't profit from them And we have supervision power that means we can go and see what businesses are doing We can also enforce against those who are breaking those laws My office has a very military specific focus I hate to see a service member sign a bad contract.

I want them all to be educated enough not to do that. So we're going to do some education initiatives When they join the military and when they get out to give them some opportunity for financial coaching We're looking at their complaints We get a large number of them so we've been monitoring those We're been able to get back a significant amount of money for service members who have come to us with complaints And I work with other federal agencies on issues that impact the military and also the states And the state's general attorney and state's veterans affairs. Quite a lot going on and all that to make things work for those who serve It's really great to know that all those resources are out there And you hear about the work you do I know we have a bunch of questions from people so we should just jump right in specific issues We got lots of people asking for advice on dealing with debt collectors. That seems to be a really big problem across the board. Holly, where can servicemembers and veterans go for help if they are having problems with a debt collector? Sure, I will say that debt collection is at this point our number one complaint Both from consumers and also the military When someone files a complaint with CFPB, we do ask them if they are military or veteran or a dependent of one of those It is the number one complaint We just started taking complaints in 2013 So it shows you it's really on everyone's mind.

A lot of them are suffering from a very bad practices from collectors who are doing a number of things Hounding them, calling them at work Threatening to get them demoted Trying to get their security clearance pulled Just a lot of things that are not in line with the Fair Debt Collections Act So if we have a veteran or service member feel that debt collectors are not treating them properly, They can file a complaint with us at consumerfinance.gov or at 855-411-CFPB They can also think about going to their state attorney generals office because they all have a consumer division And they are very interested knowing about individuals who are breaking the law within their state Wonderful, Marietta, anything you want to add dealing with debt collectors? I just want to remind folks that you have rights when you deal with debt collectors.

There are limits on when and where they can contact you. They can’t call you before 8 am or after 9 pm nor can they contact you at work if you tell them your employer disapproves. They have to stop contacting you. There are also limits on what they can say Collectors can’t harass you, make false statements or claim that you’ll be arrested if you don’t pay the debt. So there are limits there. If you dont want to be contacted by a debt collector even if you owe money you have a right to stop them from contacting you. And you have the right to send a certified letter asking the debt collector to stop contacting you and they have to abide by this request.

That's really great to know. Before we wrap up the topic of debt, are there any resources available to help them deal with debt collection issues? On our website, consumerfinance.gov we do have a section called ask CFPB We have lots of FAQs about financial issues and certainly debt collection is one of those issues. There's a tab you can click on that says debt collection. You can find a lot of answers to those common questions about what your situation might be. what the collector can say and do In addition to answers we also have some template letters you can use to help you write a letter back to that debt collector.

Letters that say things like I want to know more about this debt Or I don't believe this debt is mine Or you need to stop contacting me There's a variety of template letters we think may be helpful I think it can be very intimidating if you have a debt collector being very aggressive on the phone and you dont know what to answer Sometimes it even helps if you can take a step back and go take a look at our site We can answer some of those questions And you can send that letter or use it as a model of what to say to them Things like show me the debt is mine Because in many cases, debt collectors because many cases debt collectors buy up old debt for pennies on the dollar And it may turn out that the information they got was wrong on a debt you paid off ages ago but they're going to keep hounding you for it We want to help with some strategies that make them stop That sounds great.

Thank you for sharing that. I think that's definitely something questions about letting people know their are resources out there. Thank you for letting people about that. Another area that we also got questions specifically from family members of disabled servicemembers or veterans. They wanted to know if there are any special protections against scams/fraud for those who are disabled/handicapped? There's a few things we've addressed just recently. In fact, we got a couple blogs on our website that you can look at One is, if you're getting social security disability income, there have been some problems where people have tried to qualify for example for a mortgage and they've had the lender prove that they are disabled to get a doctor's note saying how long they're going to be disabled basically a lot of information they shouldn't be asked for The CFPB did put up some guidance saying its not ok to do this If the VA has declared the service member disabled, then they're disabled. You don't need to find out further information about the nature or duration. We also did a blog about in some cases where the service member is 100% disabled the likelihood that they'll be able to…and they have student loans…they may never be in that position to earn the full salary where they can pay off those loans There is a provision where they may be able to get those loans forgiven.

We want them to be aware of that and want them to know We also want to if they've done that process and The loan forgiveness has been reported incorrectly to the credit bureaus And its negative on their credit scores which lowers scores significantly If that happens we want to know about it for sure And to mention a few other things. We do have an office for Older Americans and they put out a series of guides called "Managing someone else's money" And one of those guides are about people who manage the money for veterans It might be something that can be very pertinent for someone trying to manage finances a severely disabled veteran.

Veterans and Servicemembers: Find Help to Tackle Debt, Scams and Fraud

It's a free guide you can get at our agency Lastly, one scam that we do see a lot of is directed really to veterans and the scammers get hooks in the veterans by promising that they will get them group benefits quickly In particular one called "aid in attendence" which is designed for severely disabled veterans who dont have much money and need assistance with daily activities of life it could be a couple thousand dollars a month but scammers use that to guarantee they can get those benefits basically a way to get into the veterans finances.

In some cases to clean them out or if they have too much money to qualify they'll move their money into something that the veterans can't access and then declare they qualify because they have no money. We saw one case where the veteran put their money into an annuity where he wasnt able to access until he was 90 something years old. Don't forget the state's veterans affairs, don't forget about us, but also don't fall for somebody that tells you they can help you get your money benefits quickly and guarantee them because that's likely a scam.

That's great advice. Thank you for sharing all of that. We're going to switch topics one more time and move on to another topic that was extremely popular: dealing with mortgages. Navigating that minefield can be tricky. Holly, can you tell us about some of the problems you've seen and what resources you used to help people who've complained? Mortgages were really one of the first issues I heard a lot about. When the housing market went south, a lot of people owned homes and saw their value drop to a point where we call underwater where the house was not longer what was owed for it For active duty service members that was a real problem because they owned a house, they were making their payments, but the house had gone underwater and then the servicemember would get orders to move to a new duty station or even overseas What do they do then? They got a house that they can't sell enough to pay off.

I discovered in that first year a lot of the federal programs were kinda one size fits all and did not take into account the unique challenges that servicemember families face. They assumed that they would be delinquent on their mortgages and I had to go in and explain No actually they may not be behind on their payments but they're going to be if they can't get this situation fixed. We were able to get some changes made. Treasury, Fannie Mae, Freddie Mack all changed policy to say that Military forced move qualified as a hardship without the service member being delinquent And then I pushed it and went farther of occupation.

That's not the way it works for service members. In 37 years of active duty life, I've moved 24 times. We can't stay in a house. What some service members were doing was leaving their family in a house and going by themselves which was unfortunate. We did get Treasury to change their HAMP program to say they still consider the home owner occupied if the service member intended to come back to it And did not but a house somewhere else. So that I think was very helpful. In the end the Federal Housing Agency and Freddie Mac which is about more than half of all US mortgages They decided on the basis of what we talked about They would say if a service member would have to do a short sale In other words sell the house short of what they owed They would forgive the difference of what they had sold it for and what they owed and what they owed which was a real, very exciting development And that went into effect November 2012 That's very gratifying to see that happen and to be able to start seeing that military life can be unique in ways While programs are intended to do good, they don't always fit that community In a way that they would normally affect typical citizens My office also works a lot with the VA Home Loan Program In July 2011, our first complaint category we opened was credit cards.

But we had plenty of people calling in about mortgages and calling with complaints that couldn't wait. In other words about to be foreclosed So we thought what can we do? We arranged to have them connected to housing counselor help but I also talked to the VA Home Loan Program They said if they're veterans, we want you to refer them to us because we may know about benefits they qualify for that could help in this situation We've had a great relationship with the VA and they also have a version of a short sale loan That would certainly be another resource for service members to think about The VA Home Loan or if they have another type of issue they can file a complaint with us Or again they can go to AskCFPB and hopefully find some answers That's really great. It's great to hear the steps you made. We're glad you were able to get agencies to look at some of these unique issues that service members and veterans and their families might have.

Marietta, I know there’s a lot of great information in the Consumer Action Handbook for people who are looking to get a mortgage or even refinance. Can you share a few the top things people should be aware of? Sure, A few things here. Housing is one of the biggest decisions that consumers make There are a couple of aspects that we address. 1. Think about when you're buying a home, Shop for your realtors, brokers, for a bank mortgage brokers with your state’s department of banking, consumer protection office or licensing agencies to see if there are complaints on record for them Make sure to check certifications and licenses. Make sure there aren't complaints or records of wrong doing. Also, shop around for interest rates and get quotes from several lenders for the same loan amount so you can compare the options. Finally If you’re thinking about refinancing, you need to determine if the amount of savings on your mortgage payments will be greater than refinancing costs like appraisals, changes in taxes, early termination penalty for paying off your current mortgage for a new refinanced one.

Those are just a few tips. There are many other things available particularly your rights and limits with paying loans. Just make sure you're able to do your homework while shopping so you can really get a good deal That's a great point you bring up about doing your research to find a better deal. I know we have shared a lot of great information today, so let’s wrap up with one final question to pull all of this together.

Holly, we'll start with you. And Marietta you can answer as well. Our last question, are there things that servicemembers and veterans can do to protect themselves as consumers? What are ways they can become smarter consumers when they are making big decisions? There's a number of things they can do One is just to be an educated consumer They should all check their credit report That's one of the first things that they should do AnnualCreditReport.com which is the official site where they can get it for free Despite all the catchy advertising you may see They may find a surprise If you have a common name, you may have someone else's information on your credit report. So even if you know you've done everything right, that doesn't mean your credit score is error free, but you can fix that If you see an error you can contact the credit bureau and say this isn't my debt Or this is a debt I paid off If you don't get satisfaction from that, we want to hear a complaint because we do supervise the credit agencies So check your credit report, that'll give you an idea of the kind of interest rate that you might get If you're going to invest money with somebody, check out their credentials at the financial regulatory authority FINRA.org They have a broker check that you can look up We had a scam in North Carolina where they scammed 8million of peoples' money Obviously buyer beware Check the total cost of the item Don't focus on the monthly payment- often how its marketed What's the total cost? And don't let yourself be rushed into a decision.

You can always walk away and say let me think about this. If you're active military, you can take it to your JEG You can do some research and see if you can get a better deal You'll save yourself a lot of heartache if you do some of those things before you sign on the dotted line Once you sign the contract, it's very difficult to get out of it. Sometimes you might be paying for that mistake for years And one last reminder Ask CFPB, consumerfinance.gov Wonderful! Marietta, do you have anything you wanted to add? She covered a lot of great information. But I have a few other things I would suggest ordering the consumer action handbook. You can get a copy at publications.usa.gov or download an electronic version for your e-reader The handbook covers a lot of information. It's part of our wide variety of consumer issues to help you be a smarter consumer. Use your resources. Holly talked about the JEG officers. Talk to people in your neighborhood to identify the companies who are reputable.

Avoid shady companies They have a good pulse on what that community has to offer. Take advantage of that. As well as using information from other government agencies. Holly has talked about so many CFPB resources, but CFPB is not the only agency that has great info. USA.gov has a lot of information for consumers, military and veterans. FTC, VA, etc. those are all great resources to tap into As well as the state consumer protection offices because in many times a lot of consumer related issues are regulated on a state level For instance if you buy a car and it breaks down 10x in a month You might have a limit but that's regulated on a state level vs a federal level So being able to use those resources is key Also take advantage of some protections that you have a military personnel You can put an active duty alert on your credit report So no one can apply for fraudulent credit while you're deployed That's a great protection.

It will give you piece of mind to know you're protected from identity theft. They're rampant. That's one of the top complaint areas that we hear about. Make sure you're reading contracts before signing. Don't get pressured into buying things or high pressure tactics Dont sign things with blank spaces Just being informed and asking questions from people who can lead you in the right direction. Well I think we are just about out of time for today. Thank you to everyone who tuned in to watch today I wanted to thank Holly and Marietta for sharing all of these fantastic resources. If you still have questions or a need to file a complaint you can contact the CFPB at http://www.consumerfinance.gov/complaint/. And if you do want to get a copy of the consumer action handbook, you can get that at publications.usa.gov thank you again for joining us!.

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