Protect yourself: Avoid military scams

From identity theft and phishing to bad car loans and card cracking, scams targeting service members can lurk around any corner. Learning about these common scams is the first step to avoid being a victim.

According to the Federal Trade Commission, in 2023 Americans lost a staggering $10 billion to fraud, an increase of over $1 billion since 2022. Military families are particularly at risk. In 2023, fraud and imposter scams cost military consumers over $178 million. It seems that every year, scammers get smarter and use savvier tricks to swindle their way into your bank account.

And scammers understand the military. They know military terminology. They know that military members receive a steady paycheck. They know what you're posting online.

Many new service members can be easy targets because they could be receiving a paycheck for the first time and may not be fully aware of how many scams are out there.

Read on for tips that can help you recognize scams targeting military veterans and service members before they cripple your finances.

How to recognize the most common service member scams

Scammers can be so convincing that many service members give out personal information before realizing they've been scammed. Unfortunately, recovering this money is difficult if not impossible once you've provided your information, even if you gave it inadvertently.

But if you educate yourself on the types of scams that are out there — and how you should respond if you notice suspicious behavior — you're in a position to protect yourself and your finances.

Identity theft

Scammers can pretend to be official government agencies or military personnel. They might offer military discounts or say they're representing a bank that offers payday loans. Anything to make you believe it's a legitimate request or business transaction.

One way you can protect yourself is by guarding your personal information. Shred bills or other important documents instead of throwing them in the trash. Don't share private information in public places and beware of phishing or imposter scams designed to trick you into giving out your banking information.

Phishing

FBI's Internet Crime Report of 2023 reports that people lost over $18 million to phishing and spoofing scams in 2023. Even though this number is down from previous years, we all need to stay vigilant.

These scams try to trick you into revealing sensitive information, like passwords, Social Security numbers and credit card numbers.

Phishing scams via text or email can be convincing, using official-looking logos and return email addresses. Even if you don't have the intention of sharing personal information, simply clicking the link they provide can add malicious software to your device and allow the scammer to track and record your online activity.

Impostor scams

In these schemes, a con artist claiming to be someone else encourages you to send money or share personal information. For example:

• You get a desperate email from a “friend” who asks you to wire money.
• A “store” you frequent online sends you a text telling you to click for a reward or gift card.
• A fictitious message from your electronic payment service emails you to let you know your account has been suspended.
• The “DMV” texts and asks you to click a link for a refund payment.
• The “power company” wants your credit card number or your service will be shut off immediately.
• A “financial institution” asks you to click for a change in your credit score.
• The “IRS” says you're late paying taxes and you will face a penalty.
• The “Social Security Administration” claims your number has been frozen.
• Your “bank” calls and wants to send you a code to verify your account to trick you into giving them the authentication they need for full access.

None of these messages are true, of course. At USAA Federal Savings Bank, if we need to notify members of fraudulent activity, we'll send a fraud alert via SMS text message that'll connect you to your USAA Federal Savings Bank app. We'll never call you and ask you for your multifactor authentication or online password. If you receive a call that seems suspicious, don't be shy about hanging up and calling 800-531-USAA (8722).

Car scams

With a car scam, a dishonest dealer may offer to sell or lease you a high-performance sports car when all you can afford is an inexpensive compact, or their financing department may saddle you with an unfairly high interest rate. Or someone is selling a used car online, but they don’t actually own it and are simply taking your hard-earned money. If it sounds too good to be true, it probably is.

One way to avoid some car scams is to know how much car you can afford. Know this before even stepping onto the car lot. That way, you aren’t even tempted into a car you can’t afford.

Also, you can avoid any potential unfair high interest rates by seeing what your interest rate can be before you even talk to the financing department. Check out USAA Federal Savings Bank’s auto loan rates.

Card cracking

The scammer first friends you on social media, then tells you they know a way to make big money. You give them credentials to your account such as login information, PIN, or debit card information, and they deposit fake checks into your account. Then they withdraw the money from an ATM and give you a cut of the cash.

Afterward, the scammers coach you on how to make a claim with your bank so you can be reimbursed for the withdrawal. Knowingly doing this to defraud your bank makes you an accomplice to their crime.

This one is easy to avoid: Don’t give out your credentials to people you don’t know and trust.

Job scams

These imposter scams target service members and military veterans by using online job ads that promise special consideration for military personnel. When you apply, you're asked to send additional personal information, such as checking or savings account numbers, allegedly so the fake employer can do a credit check or pay for a background check.

In addition to using your credit card, scammers use your information to file unemployment or other benefit claims that go directly to them.

One way to avoid this scam is to use a job-finding service that you trust. That’s why USAA Federal Savings Bank has teamed up with RecruitMilitary to help military members, veterans, and their spouses find jobsOpens in New Window.‍ ‍ ^{See note 1}

Real estate scams

With a real estate scam, an organization posing as a bank or debt collector contacts you and claims it will save your home from foreclosure — for an exorbitant fee. Other scammers pretend to be real estate agents and post fake ads for rental properties near the base, sometimes promising military discounts and other incentives.

Romance scams or catfish schemes

Scammers make fake social media accounts or dating app accounts with attractive profile pictures. First, they friend you and gain your trust. Then they start asking for small things.

Sometimes the scammer will say they're overseas, so they can't meet in person. Then that sets the stage for them to claim they're in an accident and need money.

Often, the fraudster gets away with this scam because the victim is too embarrassed to admit it, much less report it.

Grandparents scam

Beware of this common scam, in which criminals prey on people's natural desire to help others, especially their family members.

With a grandparents scam, the scammer might call and report that your grandchild was in an accident. You're inclined to believe them because they disclose convincing personal details — information they’ve been able to find online or on social media. For example, where the grandchild goes to school, who they're dating, where they last vacationed, etc.

12 habits that can help you avoid scams

1. Monitor for identity theft or fraudulent charges by regularly checking your financial statements. Shred sensitive documents and create strong passwords to protect your personal information.
2. Read the fine print when seeking a loan. Call your trusted financial institution to compare rates.
3. Be wary of new phone numbers. Keep in mind that most reputable companies, government agencies and financial institutions won't call to ask you for personal details.
4. Verify a caller's legitimacy by asking for the number to their organization's main switchboard. Once you've done your research, you can call them back using a number that you’ve verified and trust.
5. Never click a link in a text or email from an unverified recipient.
6. Look for clues within a suspicious email, like logos or font types that are slightly off. Hover your cursor over the sender's name to see if it's from a bogus email account with random numbers and letters.
7. Visit your installation's legal office if you're worried your home may be facing a foreclosure. Military personnel may have special protections from foreclosure under the Servicemembers Civil Relief Act, or SCRA.
8. Be careful when interacting with new people on social media and dating apps. Report inappropriate conduct.
9. Register your phone number on the free National Do Not Call Registry to reduce the number of unsolicited calls you receive.
10. File fraud reports online with the the Federal Trade Commission, or FTCOpens in New Window.‍ ‍ ^{See note 1} Forward suspicious emails to reportphishing@apwg.org.‍ ‍ ^{See note 1} And forward suspicious texts to SPAM (7726) on your cellphone.
11. If you've received a suspicious USAA Federal Savings Bank email, text or phone call, or have visited a suspicious website, immediately call 800-531-USAA (8722) or email abuse@usaa.com.
12. Share these tips with friends and family, especially when you're deployed and others are handling your finances in your absence.