A Financial Education Event
     

Red, White and Scammed – Tell Your Military Friends to Beware!


This week on ABC NEWS and KLOVE, I’ve been discussing how
thousands of service members engaged in fighting America’s battles overseas are now encountering a foe here at home. Enlisted men and women are easy marks for sleazy car dealers, insurance scammers predatory lenders, and identity thieves. So pervasive are the rip-offs and so troubling is the debt incurred by military personnel that US Department of Defense officials recently labeled the situation a threat to national security.

We have a long tradition of military service in our family. My grandfather was a bombardier who died in WWII, my father is a retired chief master sergeant in the Air Force, my husband, Bob, flew Air Force fighters for 25 years, our son, Philip, is a senior at the Naval Academy and will to cross commission into Marine Corp Aviation, our next son is headed toward the Air Force Academy next year and the youngest son wants to go to Westpoint and be in the Army. In fact, the photo you see is Bob, pinning on the Philip’s Airborne wings–the very wings Bob earned 30 years ago when he was a cadet at the Air Force Academy!

Q. The DOD has labeled the fraud situation among the military as a threat to national security. How does getting scammed impact lives overseas?

ELLIE: It’s all about distraction. When military members are distracted, whether it’s worry over identity theft or trying to wondering if their spouse is able to deal with messy finances at home—then that’s when accidents happen. Distraction leads to worry which leads to accidents. And when accidents happen, then there is loss of life. So if we want to help save lives overseas, then we can all do our part to protect our military members by exposing rip offs and scams whenever possible.

Q. What kind of paycheck does a typical recruit make & what are some of the questionable ways that local businesses try to get a piece of that paycheck?

ELLIE: They earn about $1800 per month & these paychecks can be carved to bits by bad deals. For example, a computer store outside of Great Lakes Naval Training Center in Illinois employs attractive women to troll for new sailors. Once they get them inside the store, they are pressured into buying a very basic laptop for more than $4000, which is three times as much as the computer is worth. Then they finance the deal and the computer ends up costing even more with the store also making money on financing.

Q. What are some other common ways that the military is ripped off and people should be aware of?

ELLIE: There was recently a multistate investigation launched into life insurance scams that were being perpetrated against military members just before they took off to the Middle East. These scamsters sold soldiers extremely overpriced or misrepresented policies, taking advantage of the emotional situation of leaving families to go into harm’s way. This investigation ended with the companies offering more than $70 million dollars in refunds to thousands of service members. When it comes to life insurance, military members are offered SGLI or Servicemembers Group Life Insurance, which is a legitimate source for low premiums, so there’s really no need to secure other private insurance!

Q. Tell us about the “Red Cross” scam that is getting a lot of attention among military families?

ELLIE: This is fairly despicable, as it prays on the emotions of family members. A con artist claiming to be with the Red Cross will call a parent of a servicemember or their spouse, telling them their loved one has been injured and they need their social security number to authorize help for them. In some cases, they ask for an initial cash payment. Military members need to clear any report of injury through the chain of command or by contacting the base family community services.

Q. It seems that our military is very young, what is the average age of a service member and do they receive any kind of personal finance education as part of their training?

ELLIE: Yes, they are young, in fact, the average age range of military members is between 22 and 28 years old. Of the groups I routinely speak to around the world, I’d say that the average 22 year old has an even younger wife and a baby as well—so it’s a lot of responsibility for someone so young. The good news is that since 2004, service members learn about personal finance as part of their early training. When I go to give my “Heroes at Home” message I teach about finances and also encourage them to use the resources they have available to them on base. Army Community Services, Airman and Family Readiness Centers, Fleet and Family Support Centers—all of these have personal finance counselors there who are ready and willing to give free financial counseling to service members and their families. It’s what I call my $300 tip, because a couple hours with the caliber of financial professional at any of these centers is equivalent to paying $300 to a CFP or CPA.

Ellie Kay
America’s Family Financial Expert (R)
http://www.elliekay.com/

Red, White and Scammed – Part II- Answering Your Questions

Here’s a blast from the past–when our children were little & white tights were in!

This is part two of a series that is an effort to help military families. I’ve been on ABC News and KLOVE these past two weeks, answering your questions.

Here’s a transcript for those of you who asked–Be sure to pass this link along to your military friends!

Q. Ellie, you came to our Army base to speak last November and I think that your message really helped me get through my husband’s deployment. Thank you for the work you are doing with military families. I did have a question about ordering items online. You showed us how to pay 40% less by using some websites, but how do I know if the website is legitimate?

Steph from Rothenburg, Germany
Submitted via online contact form
ELLIE: Steph, thanks for writing and thank you for what you do as a military family member, I admire you so much and know it’s a hard job! To avoid getting scammed online, make sure that you never respond to an email inquiry, but you find the site yourself on your own search. Then, go to BBB.org to make sure they aren’t listed and also check out the FTC.gov, plus the Internet Crime Complaint Center at IC3.gov, to investigate complaints against the company.

Q. I’m 19 and have been a soldier for 18 months. There are quite a few of my friends who regularly go to the payday loan business that is right outside our base. I keep telling them that they are losing a lot of money by getting a pay advance, but they say the interest rates are low and it’s no big deal. What do you think?


“Private Benjamin” from Ft Bragg
Submitted via Facebook
ELLIE: Private Benjamin, thx for your service and you’re the smart one. Tell your friends that some of these payday loan companies are charging as much as 500% interest. Even though the Defense Authorization Act of 2007 put a cap of 36% on interest loans to military members, many of these companies skirt the law by added exorbitant fees and calling the loans “revolving lines of credit” instead of payday loans in order to bypass the law.

Q. My husband’s hazardous duty pay was backlogged by red tape and didn’t arrive early enough for us to pay our bills. How am I supposed to pay things like our car loans while he is in the Middle East if I shouldn’t go a payday loan center?

Justine Long, Fort Drum, NY
Submitted via Facebook
ELLIE: In situations like yours, there are resources as near as your Army Community Services center where they can offer free financial advice. In extenuating circumstances, such as yours, you might even qualify for special programs offered by the Army’s charity, Army Emergency Relief or the AER. By going to these legitimate resources, you can avoid getting ripped off.

Q. Our community here in Alamogordo, NM is very supportive of the military and so is Las Cruces, which is a little further down the road. Many businesses carry banners that say, “we support our military.” Even so, a friend of ours bought a car from one of these places and it turns out that the dealership didn’t own the title and then went out of business. Now our friend has an $12,000 loan to pay and no car to show for it! How can we avoid being “taken” and who can we trust?

Heidi Rothenburg, Holloman Air Force Base
Submitted via blog

ELLIE: Heidi, I’m so sorry to hear of that situation, especially from a business that advertises its support of the military. Unfortunately, auto vendors are a huge source of complaints. In most cases, the salesperson will offer you “easy credit” but you pay jacked up prices, hidden fees and interest rates of 15% to 20%. Military financial counselors have files full of horror stories. Bad dealers have taken cars in trade, promising to pay them off and then they go out of business, leaving service members with two payments. Go to BBB certified dealers and if the deal sounds too good to be true, just walk away, because it usually is. Or go to your base’s ACS, Airman & Family Readiness Center or Fleet and Family Support Center for local financial counseling.

Q. My daughter just got commissioned with the Marine Corps and I’m concerned about the possibility of someone taking advantage of her financially. Are military members bigger targets for fraud than civilians?

Sue Simpson, Stillwater, OK
ELLIE: Military members have guaranteed paychecks and won’t ever get laid off. This makes them good credit risks. But it also makes them targets. Some people see the military as cash cows and they want to get their cut. One of the greatest evidence of this fact is that outside of any large military installation, you’ll see businesses that offer payday loans, pawn shops, and check cashers. These are the kinds of businesses that prey on unsuspecting military.
Stephanie, Phoenix, AZ
Submitted via email
Thank you to those who serve!
Ellie Kay
America’s Family Financial Expert (R)

Considering Debt Consolidation? BEWARE!

You could be in debt 3 to 5 years LONGER if you go to the wrong debt consolidation company. On ABC NEWS, I answered the following questions from viewers, so it’s wise to review these before you choose a firm!

Q. I’m at the point where I have $20,000 in consumer debt and I know I need to do something about it. I’ve been looking around for a company that will help me, but I want to know what red flags I should look for so that I can find one that is legitimate.

Drowning in Debt in Durango
ELLIE: Well there are quite a few red flags to look for. Stay away from them if they:
• Guarantee they can remove unsecured debt,
• Promise debts can be paid off at pennies on the dollar,
• Require substantial monthly service fees,
• Demand a percentage of your savings as payment,
• Advise you to stop making payments to your creditors,
• Say that creditors never sue consumers for non payment
• Promise that their system won’t hurt your credit record.

Q. We went to a debt relief company for an initial meeting and we’re not sure if we should go with them. They don’t charge an upfront fee, instead they charge a percentage of the amount they will save us. But we’re still going to have to pay. Is this good?


Samantha and Tommy from Riverside, CA via facebook
Ellie: In the past, it wasn’t necessarily good, because there wasn’t a regulation about what they claim they’ll save you and many companies inflated their estimates to get even more money from consumers than if they charged an up front fee. It was still a fee, but it was wrapped up in prettier paper so that the consumer thought they were better off. But there’s good news, under the new FTC rule, if the company bases its fees on a percentage of the amount it estimates you’ll save, it must also provide both the percentage and the estimated dollar amount that represents in writing.

Q. We are talking to a debt consolidation company and it’s all so confusing. We want to save money on our overall credit card bills, which cost us about $800 a month. But the company is telling us to make payments and save up—how much are we suppose to save?

Alton and Sharon from Oxford, NY via online contact form
ELLIE: Before the FTC rule, you didn’t really have a way of knowing but now you do. These companies usually ask you to make payments to a dedicated account. When a certain amount has been saved, they’ll go to your creditors and offer to pay off a percentage of the debt. You should ask the company: “How much will I need to save?” The new rule requires debt settlement firms to provide a reasonable estimate of the amount you’ll need to save before they’ll make an offer.
Q: When my brother and his wife set up a debt consolidation, they had him set up a fund that he made payments to. It turns out that the place that held the money was also in partnership with the debt company and he wasn’t allowed access to the money. Is this the way it is suppose to be done?
Audrey submitted via Online Contact Form
Ellie: No, it’s not suppose to be that way and under the new FTC rules this kind of holding or savings account will have closer regulation. The FTC now requires that the customer have full access to the funds, they must be held at a financial institution not associated with the debt consolidation firm and the customer would have the right to withdraw the money at any time.

Q. I was thinking of calling my creditors myself but my friends say I should let the debt consolidation company call them. Who is right?

Moriah Stephens from Allentown, PA

Ellie: In this case, I think you are the one on the right track. You should try to call your creditors yourself before hiring a debt settlement firm. You can sometimes develop your own workout plan because it is in the creditor’s best interest to help consumers pay off their bill.

Q. Where can I find a legitimate non-profit debt consolidation company?

Mike from Mechanicsville, VA via Ellie Kay’s blog
Ellie: The National Consumer Credit Counseling service is a non-profit organization that has thousands of partners across the county. Go to Nfcc.org to find an office near you.
Ellie Kay
America’s Family Financial Expert (R)

Counterfeit Products — Deals or Dangerous Duds?

 

I was given a designer purse as a birthday gift and was so thrilled until one of my other friends pointed out that the nameplate should say “Prada” not “Proda.”  So my Prada was a Nada, which was embarrassing, but it wasn’t life threatening as other counterfeit products are. For example, the third most commonly copied product is drugs. The U. S. Customs department said that agents seized 24% more shipments of counterfeit goods last year (2011) than the previous year. In fact, fake purses didn’t even make the top ten list of these kinds of bogus products.

Top 10 Counterfeit Products

 

  1. Electronics
  2. Shoes
  3. Drugs
  4. CDs and DVDs
  5. Clothing
  6. Perfume
  7. Watches
  8. Cigarettes
  9. Computer Hardware
  10. Toys and Games

 

The Food and Drug Administration found fake versions of the cancer drug Avastin that made their way into doctors offices and in two cases, consumers received counterfeit versions of the attention deficit disorder drug Adderall. A mom noticed the misspelled label and alerted authorities. Way to go, mom, I guess a secondary clue was that junior was bouncing off the walls instead of calmly reading a book.

 

The Electrical Safety Foundation International says that there have been more than 1 million counterfeit electrical products recalled in recent years to include extension cords, batteries and power strips. These fake versions can cause fires and destroy devices.

 

The most popular knock off is electronics where the Gallup Consulting group found that 64% of counterfeit electrical products are purchased from legitimate shops and retailers! This includes iPhones, iPads and iPods. Phony apple stores abound in China and Hong Kong—the country that accounts for 80% of the value of counterfeit goods.  There was one industrious crook in America who set up a fake Apple storefront online and sold thousands of products before he was caught.

 

Don’t think that buying fake shampoo, toothpaste, or perfume constitutes getting a good deal either. These phony versions of branded personal care products can contact caustic chemicals that can harm the unsuspecting public.

 

Spotting the Deal that’s Really a Dud

 

There are ways to know whether you are getting the real deal or not.

  • Look for misspelled words and incorrect grammar on products, packaging and websites.  It might be a good idea to invite your 7th grade English teach to go shopping with you.
  • Beware of packaging, websites and products that don’t include company names, toll free numbers or other contact info. In fact, you can whip out your legitimate iPhone and call the toll free numbers on the product to see if they work or not.
  • If an item doesn’t come with a product manual that contains safety warnings and instructions for use and maintenance, then it’s probably a dud.
  • Don’t ever buy toys, anything electrical or items for children from flea markets or dollar stores that don’t allow returns.
  • Watch out for fake UL marks. The legitimate one includes “UL” in a circle, the word “LISTED” in all caps, the control or issue number and what the product is.

When in doubt, go to the Better Business Bureau www.bbb.org  or the Federal Trade Commission www.ftc.gov to see if there’s been an alert listed for the product you are purchasing

 

Ellie Kay

America’s Family Financial Expert (R)

Job Scams and Homebased Businesses

 

I was on the ABC NEWS “Good Money” show, and answered your questions! Be sure to email us for a FREE “Homebased Business File” and mention you heard me on “Good Money!”

Q. We are interested in starting our own home business and want to know what first steps we should take in deciding what kind of business to operate from home.
Julie and Vick from Rancho Cucomonga, CA via facebook

ELLIE: There are basically three kinds of businesses: sales, service and manufacturing. Sales can take many forms such as retail or wholesale, mail order or direct sales. They tend to offer more flexible hours but require more paperwork. Service businesses are the easiest to set up and can require the smallest initial investment. If you do something well, like painting or decorating, fixing things, cleaning houses repairing computers, etc, you can start your own service business. Finally, there is manufacturing—everything from crafts to jewelry, furniture and more. Once you decide on the kind of business, do your research online or with the help of a research librarian, subscribe to industry magazines and talk to those in that kind of business.

Q. Are there any online resources available for us to find someone who will give us free advice on our small graphics and design business.
Mike and Victoria from Syracuse, NY via online contact form

ELLIE: Yes! You can go to SCORE.org, which is non-profit organization designed to help small business owners with over 12,000 volunteer counselors across the country. They can hook you up with a mentor to answer your questions online or in one of their offices. Their volunteers are made of experts in 600 fields who have been successful in their own businesses and include former CEOs! If you are interested in funding your startup business you can go to Kickstarter.com or since you’re an artist you may want to find funding for your project by going to IndieGoGo.com

Q: I’ve worked for the same construction company for 20 years and just got laid off. I have a dream to start my own carpentry business, but I’m not sure that I have what it takes to do it. How do I know if I can hack it or not?
Mark submitted via Online Contact Form

ELLIE: That’s a great question, Mark, and since the SBA says that 1 in 2 small businesses will fail within a year, you have every right to question your ability to succeed. I think the key lies in planning and doing your preparation work. It’s important and assess your personality and skills. You can take the Personality ID test offered at your SBA center, college, library or community center. It will help you look at yourself from a fresh perspective and asses whether your personality is best served as an owner or an employee. I also think it’s important to pursue your passion. Do you really love carpentry or has it just been a job to you? When you pursue your passion, not only does it get you up in the morning but it makes more likely to succeed!

Q. My mom sells Premier Jewelry and my best friend sells Mary Kay. Both of them are pressuring me to sign up under them in order to build their business. How do I make the decision about which homebased business to start.
Jenny Monroe from Oklahoma City, OK

ELLIE: Jenny, there’s a phrase you need to learn right away: It’s nothing personal, just business! You need to make your decision based on what is right for YOU, not based on who you love more: your mom or your friend! I’ll send you the Homebased Business file for free if you go to elliekay.com and in that file you’ll see 25 questions you need to ask each woman about their business including: What are the start up costs? What is the hostess plan? Does the company pay sales tax or do I have to do that myself? How many downline generations are paid? How much inventory is needed? It’s important to have all the facts available and then make your decision based on business and not on anything personal!

Q. I’ve dabbled in writing here and there but I want to try and go into it on a more full time basis, should I try to freelance various writing projects or should I offer my writing services as a subcontractor to an existing company that need writers?
Ted from Chicago, VA via Ellie Kay’s blog

ELLIE: The answer is “yes.” It’s easier to launch a service based industry, such as what you’re essentially talking about by subcontracting work to an existing firm. Outsourcing is becoming more and more prominent as jobs are streamlined and companies downsize. It’s cheaper to hire a contractor than paying benefits to a full time employee. So hook up with your local Chamber of Commerce and plug into businesses in your community. At the same time, get The Writers Guide online or from your local library and begin to pitch articles to various periodicals by writing a good query letter and tailoring each article toward the specific needs of the publication. Ted, with how work and bit of luck you’ll find yourself doing what you love and having your dream business at the same time!

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com

A Drama Queen’s College Savings Tips

I read an excellent blog on #USAA about 4 Smart Moves when saving money in college. It reminded me of a time many years ago, I remember hearing the sound of a child crying. It sounded like it was coming from the back of the house. When I opened the door to my daughters room, I found my then five-year-old Bethany sobbing into her pillow. Crying wasn’t terribly unusual for our “Bunny,” as she could have starred in a movie called I was a Preschool Drama Queen. She was usually laughing and hopping for joy, but she did have an occasional bad day and when she did, we had to watch out!

“What’s wrong, Bunny-rabbit?” I asked as I stroked her hair.

“Well… it’s… just.” She tried to catch her breath.

“…it’s just. It’s just that…” her tiny frame shook as she tried to compose herself.

“I’m going to… (whimper) to go away for college!” At this, her sobbing started all over again.

Apparently, she had a friend whose much older sibling just graduated from high school and was headed off to college. So Bethany was under the impression that when she “graduated” from kindergarten, we were going to ship her off to school.

Thankfully, we were able to keep Bethany around for another 13 years, but she did eventually go away to college—and graduated over a year ago. Here are some more tips we gave each of our children as they went away to college to save money on school and to put it towards their coffee budgets instead!

 

  1. Buy Books Online: It’s way cheaper to buy books online instead of used at the bookstore. For example, my son Daniel got a journalism book that was $30 used at a bookstore, but he found it for $1.50 online. Amazon usually has the best deals for books, but Campus Books compares prices across the Internet and finds the best deals new and used. Just be sure you buy them at least two weeks before classes.
  2. Avoid The Meal Plans: First off, college-based meal plans are usually unhealthy (fast food, fried, high calorie, high carbs, etc.). Second, they are way more expensive than just buying your own groceries. Consider buying the cheapest meal plan, or none at all. simply cut a few coupons, and don’t buy the expensive brand stuff at grocery stores, and you’ll do fine (you can eat fancy later!).
  3. Take Tests! There are many exams that can be taken for college credit, such as CLEP, SAT II, and more. These tests usually run around $50-$75, but if you pass, it’s a lot better than shelling out over a thousand dollars for the course.
  4. Don’t Be Afraid To Live Modestly: From the dorm furnishings to clothes, you don’t have to live flashy in college. Just because other young adults are spending their money foolishly doesn’t mean you have to. College is just a step before getting a job where you can earn some real money and but the little things you want. Ross, T.J. Maxx, and Marshalls are great for clothes, and there’s always great clearance furniture items at stores that will serve your purpose.
  5. Find a Roomie: If you’re searching for an apartment, or even a dorm room, it is better to split the cost with one, two, or more people. Sure it’s always better living by yourself, but you have the rest of your life to do that if you want. Many colleges also have the option of getting a single or a double room. Double is always cheaper, and a great lesson in learning to live with someone else!

Ellie Kay

America’s Family Financial Expert (R)

Red, White and Scammed – My Video Blog!

How do you avoid being a part of a scam?  Whether it comes to those trying to take advantage of our military with the “REd Cross Scam” or those who are confused about whether a Fixed Indexed Annuity is a good deal. This Video Log that I just finished in conjunction with my education work for the IALC (Indexed Annuity Leadership Counsel) has the answers you are looking for in whether a good deal is in fact, good or whether it is fiction!
Yep! See the post live here

How do YOU recognize a scam?

Ellie Kay

America’s Family Financial Expert (R) 

 

Soldier of Finance

My profession is finances but my passion is helping military families.  But I’m not the only writer whose professions and passions collide. At a #USAA blogger conference held every Fall, I met Jeff Rose, author of Soldier of Finance, where he compares the battles of finance to that of the reality of living in the military. He has great stories about his time in the military, and correlates them directly into the war of Finance.

In a chapter entitled “FRAGO—The Savings Accounts Survival Guide,” Jeff talks about the importance of putting away an emergency fund to be able to pay bills and enable you to live for a period of time if your income were to suddenly stop. Just like life in the military, there are always going to come things that you cannot predict and you must have the means of adjusting your plans on the basis of new contingencies.

The Army calls these midcourse corrections FRAGO, which stands for “Fragmentary Order,” but Jeff calls it “Financial Reserve and Goal Fund.” He suggests that 3 months is ideal, which gives you time to make whatever adjustments are necessary. He warns to also be on the lookout for imposters that make you think you have cash on hand when you do not, which are taken directly from Jeff’s book:

  • Credit Cards: Just because you borrow cash does not mean it comes cheap. When you pay 20% interest on the money you borrow, you are just digging yourself into a deeper hole.
  • HELOCs (Home Equity Line of Credit): Equity in your home is not as good as cash. When you take out a line of credit on your home you could potentially be putting yourself at financial risk because: 1) HELOCs are debt because you are still borrowing money, 2) They may disappear because the rules and availability if HELOCs have changed since 2008, and 3) Because you use your home as collateral, you could lose your home if you aren’t able to make the payment; it’s not worth putting your home at risk.
  • Payday Loans: If you take out a payday loan, you could still have the same problems as a credit card, but worse interest rates. About 200% to 500% worse, to be precise. Don’t get sucked into these vicious cycles.
  • Your Stuff: If you think you can sell your stuff at a pawnshop or consignment store, Jeff recommends to not bank on it. There are other people thinking the exact same thought, and you will be very surprised at what you will actually receive for your “valuable” items.

Jeff gives solid financial advice whether you are soldier or not. It’s great to have friends that love military families as much as I do!

Ellie Kay

America’s Family Financial Expert (R) 

 

FInancial Pre-Deployment Checklist (part 2)

 

Are your finances ready for your next deployment?  If you have all your business affairs in order, then you will have less stress on your next deployment because you won’t be worried about the things you didn’t get done. The items on the checklists from our last blog and from this week will make all the difference in minimizing stress not only for yourself, but for your loved ones as well.

  • Budget – If you are married, then set up a budget with your spouse that can be used throughout your deployment. Make sure they know when bills are due and how much is owed for regular payments. If you email me at assistant@elliekay.com and request the “Sixty Minute Money Workout” we will send you a free guide that can help you set up your budget with your spouse or a “money buddy” so that you can establish a budget and discuss financial matters with your mate without arguing. Mint.com has an excellent budgeting app and there’s an interactive, free budgeting tool at elliekay.com as well.

 

  • Will including a Living Will or advanced medical directive. Don’t get so busy that you rely on the laws of the state for which you have residence to administer your estate. Instead, make sure you have a will that not only includes who will have control over your financial assets, but also include where you would like to be buried and if you want cremation or not. We once lost a pilot in a routine training accident in our squadron. His wife was left with a six week old baby girl and she had to face his parents who insisted he be buried in their hometown while she had other ideas of what he wanted. The more specific you are, then less headache your family will have when they are already dealing with tremendous loss.

 

  •  Accounts and Auto Pay Bills – List all accounts (credit card, car, utilities) and any passwords or acct numbers for the person taking care of your bills. If possible, set up these accounts to pay automatically so that you are not late on them and won’t get a hit on your FICO (credit score).
  • Legal Documents – Gather all legal documents such as birth and marriage certificates, deeds, mortgages and automobile titles and put them in one central location so that they are easily accessed by your spouse.
  • Meet with Personal Financial Manager (PFM) from the installation family centers or through MFLC (Military Family Life Counselors) or Military OneSource.com to go over any other financial issues that need to be settled before you deploy.
  • Emergency Financial Assistance   In the event the family may need assistance while the servicemember is deployed, it saves time and headache to take care of this ahead of time. You can pre-Authorize assistance by going to:  http://www.nmcrs.org  (Navy-Marine Corps Relief Society).

Whether you are single or married, it’s important to check off the above items to make sure you are financially ready for deployment. Thank you for your service and a special thanks to those family members who support you as well!

 Ellie Kay

 

 

Red, White, and Scammed: Part 1

 

We have a long tradition of military service in our family. My grandfather was a bombardier who died in WWII, my father is a retired chief master sergeant in the Air Force, my husband, Bob, flew Air Force fighters for 25 years, our son, Philip, graduated from the Naval Academy and cross commissioned into the Marine Corp, our next son is a junior at the Air Force Academy, and the youngest son a plebe at Westpoint. In fact, the photo you see is Bob, pinning on the Philip’s Airborne wings–the very wings Bob earned 30 years ago when he was a cadet at the Air Force Academy!

Enlisted men and women are easy marks for sleazy car dealers, insurance scammers predatory lenders, and identity thieves. So pervasive are the rip-offs and so troubling is the debt incurred by military personnel that US Department of Defense officials recently labeled the situation a threat to national security. Here are a few things to keep in mind and to share with your military friends and family.

Q. The DOD has labeled the fraud situation among the military as a threat to national security. How does getting scammed impact lives overseas?

ELLIE: It’s all about distraction. When military members are distracted, whether it’s worry over identity theft or trying to wondering if their spouse is able to deal with messy finances at home—then that’s when accidents happen. Distraction leads to worry which leads to accidents. And when accidents happen, then there is loss of life. So if we want to help save lives overseas, then we can all do our part to protect our military members by exposing rip offs and scams whenever possible.

Q. What kind of paycheck does a typical recruit make & what are some of the questionable ways that local businesses try to get a piece of that paycheck?

ELLIE: They earn about $1800 per month & these paychecks can be carved to bits by bad deals. For example, a computer store outside of Great Lakes Naval Training Center in Illinois employs attractive women to troll for new sailors. Once they get them inside the store, they are pressured into buying a very basic laptop for more than $4000, which is three times as much as the computer is worth. Then they finance the deal and the computer ends up costing even more with the store also making money on financing.

Q. What are some other common ways that the military is ripped off and people should be aware of?

ELLIE: There was recently a multi-state investigation launched into life insurance scams that were being perpetrated against military members just before they took off to the Middle East. These scamsters sold soldiers extremely overpriced or misrepresented policies, taking advantage of the emotional situation of leaving families to go into harm’s way. This investigation ended with the companies offering more than $70 million dollars in refunds to thousands of service members. When it comes to life insurance, military members are offered SGLI or Servicemembers Group Life Insurance, which is a legitimate source for low premiums, so there’s really no need to secure other private insurance!

Q. Tell us about the “Red Cross” scam that is getting a lot of attention among military families?

ELLIE: This is fairly despicable, as it prays on the emotions of family members. A con artist claiming to be with the Red Cross will call a parent of a servicemember or their spouse, telling them their loved one has been injured and they need their social security number to authorize help for them. In some cases, they ask for an initial cash payment. Military members need to clear any report of injury through the chain of command or by contacting the base family community services.

Q. It seems that our military is very young, what is the average age of a service member and do they receive any kind of personal finance education as part of their training?

ELLIE: Yes, they are young, in fact, the average age range of military members is between 22 and 28 years old. Of the groups I routinely speak to around the world, I’d say that the average 22 year old has an even younger wife and a baby as well—so it’s a lot of responsibility for someone so young. The good news is that since 2004, service members learn about personal finance as part of their early training. When I go to give my “Heroes at Home” message I teach about finances and also encourage them to use the resources they have available to them on base. Army Community Services, Airman and Family Readiness Centers, Fleet and Family Support Centers—all of these have personal finance counselors there who are ready and willing to give free financial counseling to service members and their families. It’s what I call my $300 tip, because a couple hours with the caliber of financial professional at any of these centers is equivalent to paying $300 to a CFP or CPA.

Ellie Kay
America’s Family Financial Expert (R)
http://www.elliekay.com/

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