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Veterans Consumer Protections SealA key priority for the Attorney General’s Office is to safeguard all consumers, including veterans and military personnel, from fraud and unfair business practices. Unfortunately, veterans and military personnel are often specifically targeted by scam artists and unscrupulous businesses.


There are many reasons why service members, veterans and their families can make attractive targets. Military pay and veterans benefits are a steady source of income. Scammers know that service members are held to a high standard for debt repayment, which may make them hesitant to challenge the debt, question shady business practices, or seek assistance. Many service members move frequently, so they don’t always know which businesses to avoid in a new community.

The information provided below relates to consumer laws and protections specific to veterans and military personnel. The AGO's Consumer Protection Division  provides additional information on a wide range of general consumer issues at: www.atg.wa.gov/SafeguardingConsumers.aspx. If you you have questions or want assistance resolving a consumer problem please contact our Consumer Resources Center at 1.800.551.4636 (M-F 10 a.m. to 3 p.m). Or, you can file a consumer complaint at: https://fortress.wa.gov/atg/formhandler/ago/ComplaintForm.aspx.

Cars | Cell Phones | Credit & Debt | Identity Theft & Privacy | Scams | Servicemember Civil Relief Act


Cars 

  Car Resources
   

For military personnel and veterans, just like for many consumers, a car – new or used – is the single most expensive purchase they make. Whether you are a service member, veteran or civilian, it is always better to be an informed consumer. The AGO provides information that can help steer you in the right direction when making car buying decisions.

The Department of Defense recently reported  that service members are falling victim to predatory practices and prohibitively expensive products causing auto financing problems. According to military financial counselors, auto sales and financing scams are the leading causes of financial problems for military service members.

The AGO recently took action against an auto repair company that was dismantling transmissions in vehicles owned by soldiers then unlawfully charging them to reassemble the transmissions.

Auto Lease Termination

Although in most cases you cannot change your mind and cancel when you sign a contract, the Servicemember Civil Relief Act (SCRA) allows active duty servicemembers to terminate an automobile lease without having to pay early termination charges if one of the following circumstances applies:

  1. The lease was entered into prior to active duty, when the servicemember is called to active duty for at least 180 days,
  2. The lease was entered into prior to active duty, when the servicemember is called to active duty for less than 180 days, but the servicemember’s orders are subsequently extended to 180 days or more without a break in service, or
  3. The lease was entered into during active duty, when a servicemember receives orders:
    • For a Permanent Change of Station overseas,
    • If you are currently in Alaska or Hawaii, for a Permanent Change of Station to any location outside or your state,
    • To deploy with a military unit for at least 180 days,
    • To deploy for a period less than 180 days, but subsequently receives orders extending the deployment to 180 days or more. 
     

To terminate the lease, the servicemember must provide written notice of the termination and a copy of their military orders to the person from whom they leased the vehicle (the lessor). The vehicle must also be returned to the lessor within 15 days of the notice.  The lessor can’t charge you for the early cancellation of the lease, but can still charge you for any taxes, title and registration fees, summonses or any other outstanding fees, including charges for excessive wear and tear and mileage that were due and unpaid on the date of termination. Any advance payments you made must be refunded within 30 days of the termination.

Sample Termination of Automobile Lease Letter

Repossessions

The Servicemember Civil Relief Act limits creditors from repossessing personal property, including automobiles, of active duty military personnel without a court order. Creditors must first obtain a court order to repossess property if the servicemember purchased or leased the property and made a deposit or installment payment on the property before entering service. This protection does not apply if you bought the property after going on active duty. The court may also stay repossession proceedings if it finds that the servicemember’s ability to comply with the contract is materially affected by military service. Consult with a military legal assistance attorney for guidance.

Lemon Law

The Washington State Motor Vehicle "Lemon Law" is designed to help new vehicle owners who have substantial continuing problems with warranty repairs. The law allows the owner to request an arbitration hearing through the AGO.

If you are in the military and assigned to duty or living in Washington, you can use the Washington Lemon Law no matter where your vehicle was purchased or leased if it meets the other standards and eligibility requirements.

For more information about the Lemon Law, visit our Lemon Law web site.

License Plates

Disabled veterans, former prisoners of war and Congressional Medal of Honor recipients may receive an exemption from license fees on one vehicle each year. Some special plates are available that do not have to be renewed.

The Washington Department of Licensing issues special veteran and military license plates along with service award plates, such as the Purple Heart and Gold Star Parent. A portion of the fees for some of these specialty plates is used for activities that benefit veterans, such as maintaining the state veterans cemetery in eastern Washington and providing programs and services for homeless veterans.

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Cell Phones

Wireless phones have become an integral tool in many of our lives, but choosing a cell phone company and deciphering cell phone contracts can sometimes be difficult. When you’re in the military, cell phone contracts may present even more challenges because of overseas deployment. While servicemembers may see cell phones as a way to stay in touch with their families while deployed, they may be unaware that roaming and international calling fees can result in thousands of dollars in cell phone bills.

The AGO is actively working with the cell phone industry to ensure that customers understand wireless services. As with any technological service, there are many things the customer needs to be aware of when making a selection. The AGO has developed general information and helpful tips for making smart choices in selecting the right wireless service.

Cell Phone Contract Termination

If you have received military orders to relocate to a place where your cell phone service provider does not provide the coverage you purchased under your contract, AND you will be in that location for 90 days or more, you may terminate your contract under the the Servicemember Civil Relief Act (SCRA). You must only provide written notice to your cell phone company of your intention to terminate, the reason for termination, and the military orders giving rise to the need for termination. You do not need to wait for a period of time before the termination is effective; it will be effective on the date you give notice to your phone service carrier. You should not be charged any early termination fees and should be refunded any fees you prepaid beyond the date of termination.

Also, if your relocation will be for three years or less, and you resubscribe to your phone service within 90 days of your return, you will be able to keep your phone number and you will not be charged reconnection fees.

Sample Termination of Cell Phone Contract Letter

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Credit & Debt

Managing credit and debt is important for everyone, and particularly for servicemembers. Poor credit and excessive debt results in paying higher interest rates and can even prevent an individual from getting a security clearance.

The AGO provides useful information about credit and debt for servicemembers, veterans and civilians alike. Servicemembers and veterans facing financial emergencies may also be eligible for federal or state resources.

Credit Reports

It is important for everyone to check their credit report regularly for accuracy and to guard against identity theft. You can order a free copy of your credit report from www.annualcreditreport.com – the only government-authorized website. Other "free" credit report websites are designed to sell you products and services. You are allowed one free report yearly from each of the three major credit bureaus: TransUnion, Experian and Equifax.

For security reasons, www.annualcreditreport.com does not work outside the U.S. and its territories. Servicemembers stationed outside the U.S. or deployed overseas can order their free credit report by using the Federal Trade Commission form.

Active Duty Alerts

Active duty servicemembers can place an active duty alert on their credit report to protect themselves and reduce the risk of identity theft during deployment. An active duty alert on a credit report means businesses have to take extra steps before granting credit in your name. Active duty alerts are in effect on your file for one year. If your deployment lasts longer, you can place another alert on your credit file.

To place an active duty alert contact any of the three major credit bureaus:

When you place an active duty alert, you'll be removed from the credit bureaus' marketing list for pre-screened credit card offers for two years. You may ask to be put back on the list earlier.

Pay Day Loans

The federal Military Lending Act requires that payday loans offered to servicememembers and their dependents include certain protections. Under the law and Department of Defense regulations:

  • Lenders are prohibited from securing the loan by holding a check, car title or obtaining access to a bank account;
  • A clear description of payment obligations and other disclosures must be provided;
  • Mandatory arbitration clauses and waivers of legal rights may not be included as terms of the loan; and
  • Interest rates and most fees are capped at an annual percentage rate (APR) of 36%.

The federal Consumer Financial Protection Bureau enforces of the Military Lending Act. In Washington state, the Department of Financial Institutions licenses and otherwise regulates payday lenders.

6% Interest Rate Cap

The Servicemember Civil Relief Act includes a provision capping the interest rates on most preexisting loans or obligations to 6% per year while a servicemember is on active duty. The 6% interest rate cap applies to mortgages, credit cards, car loans, other installment loans, and some student loans as well. All interest in excess of 6% is forgiven during the covered period of active duty and the loan is re-amortized to reduce the monthly payment.

The SCRA does not apply to obligations or debts incurred while on active duty. To qualify for the 6% interest rate cap:

  • The loan or debt must have been incurred prior to entering active duty; and
  • You must demonstrate that military service materially affects your ability to make payments (such as a reduced income).

The SCRA interest rate cap is not automatic: servicemembers need to send a written request and a copy of their military orders to their lender. Requests can be submitted anytime during active duty and up to 180 days after leaving service. You must also state why a lower interest is necessary to prevent any financial hardship on you.

Sample 6% Interest Rate Cap Letter

Repossessions

The Servicemember Civil Relief Act limits creditors from repossessing personal property, including automobiles, of active duty military personnel without a court order. Creditors must first obtain a court order to repossess property if the servicemember purchased or leased the property and made a deposit or installment payment on the property before entering service. You must also state why a lower interest is necessary to prevent any financial hardship on you. The court may also stay repossession proceedings if it finds that the servicemember’s ability to comply with the contract is materially affected by military service. Consult with a military legal assistance attorney for guidance.

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Identity Theft & Privacy

Everyone is a potential identity theft target, but military personnel and veterans are particularly vulnerable, especially when deployed overseas. The AGO provides general information about how to protect yourself from becoming an identity theft victim, and what steps to take to recover from identify theft or fraud

Active Duty Alerts

Active duty servicemembers can place an active duty alert on their credit report to protect themselves and reduce the risk of identity theft during deployment. An active duty alert on a credit report means businesses have to take extra steps before granting credit in your name. Active duty alerts are in effect on your file for one year. If your deployment lasts longer, you can place another alert on your credit file.

To place an active duty alert contact any of the three major credit bureaus:

When you place an active duty alert, you'll be removed from the credit bureaus' marketing list for pre-screened credit card offers for two years. You may ask to be put back on the list earlier.

Shred Events

Shredding sensitive documents is one way to reduce your risk of becoming an identity theft victim. The AGO maintains a calendar of free community shred events.

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Scams 

  File a Consumer Complaint
  The Federal Trade Commission (FTC) collects complaints from military personnel and their families through their secure online Consumer Sentinel/Military database. Although the FTC doesn’t resolve individual issues, complaints made to the FTC help law enforcement agencies identify trends, spot patterns of fraud, and target cases for prosecution to shut down scammers.
 
If you are from the military community and have been a victim of a scam or other dishonest business practice, file a complaint.

Of course, you are also welcome to file a consumer complaint with the AGO.

The AGO has a Scam Alert website dedicated specifically to educating people about the latest scams.

Unfortunately, businesses and scammers try to take advantage of our nation’s heroes and specifically target veterans and servicemembers with bad deals and outright rip-offs. Here are some examples of scams involving or targeting veterans and military personnel:

  • Veterans Pension Poachers – The FTC recently issued a warning to older veterans about a particularly ugly type of scam that involves “poaching” veterans’ pensions. Unscrupulous “advisers” wanting to sell financial or legal products try to convince veterans to transfer assets to a trust or invest in insurance products in order to qualify for VA Aid and Attendance benefits. What they don’t say is that such asset restructuring may have serious consequences, including losing Medicaid eligibility.
  • Charging for Military Records – This a variation on a common scammer trick -- fool someone into thinking they have to pay for something they could otherwise get for free or less expensively. Most veterans and next-of-kin can receive free military service records.
  • “Phishing” Scams - Be on guard for scammers that send veterans and military spouses unsolicited emails or text messages that appear to be from the military or VA. These types of phony emails mimic official entities in order to solicit money, financial information or personal data, such as social security numbers or credit card information. The scammers then use the information to commit identity theft.
  • Veterans Charity Scams – Many legitimate charities are soliciting donations to support the nation’s veterans as well as the families of active duty military personnel. But, the FTC warns that not all “charities” are legitimate. Some are sham operators whose only purpose is to make money for themselves. The AGO provides useful advice on how to avoid charity scams.

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Servicemember Civil Relief Act

The federal Servicemembers Civil Relief Act (SCRA) suspends certain civil obligations so active duty servicemembers can focus on their military responsibilities without adverse consequences for them or their families.

The types of relief provided under the SCRA include:

  • Capping interest rates of certain loans at 6%;
  • Protecting servicemembers against default judgments;
  • Obtaining stays or postponements of civil and administrative proceedings; and
  • Giving servicemembers the ability to terminate residential leases, automobile leases, and cell phone contracts in certain circumstances.


If you have questions about the SCRA or if you think your rights under the SCRA may have been violated, contact your nearest Armed Forces Legal Assistance Program office for assistance. Dependents of servicemembers may also contact or visit local military legal assistance offices where they reside.

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