A priority for the Attorney General’s Office is to help safeguard all consumers, including veterans and military personnel, from deceptive and unfair business practices.
Unfortunately, veterans and military service members can make attractive targets for scam artists and unscrupulous businesses. Military pay and veteran benefits are a steady source of income, and scammers know that military personnel 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. Also, many military service members move frequently and so don’t always know which businesses to avoid in a new community.
The information provided below relates to select consumer laws and protections specific to veterans and military service members. The office's Consumer Protection Division provides additional information on a wide range of general consumer issues, including some not discussed below, at www.atg.wa.gov/consumer-issues.
If you you have questions or want assistance resolving a consumer problem please contact our Consumer Resource Center at 1-800-551-4636 (M-F 10 a.m. to 3 p.m.). You can also file a consumer complaint online at www.atg.wa.gov/file-complaint.
For military personnel and veterans, just like for many consumers, a car – new or used – is one of the single most expensive purchases they make. Unfortunately, auto sales and financing scams are among the leading causes of financial problems for military service members.
Whether you are a service member, a veteran, or a civilian, it is always better to be an informed consumer. The Attorney General's Office provides a wealth of information in our "Car Resources" section to help consumers understand their rights, and tips and suggestions to keep in mind when buying a car.
Auto Lease Termination
Although in most cases you cannot change your mind and cancel a contract after you sign, the federal Servicemembers Civil Relief Act (SCRA) allows active duty service members to terminate an automobile lease without having to pay early termination charges if:
- The lease was entered into prior to active duty, when the service member is called to active duty for 180 days or longer; or
- The lease was entered into during active duty, when the service member receives orders for a Permanent Change of Station outside the continental United States or o deploy with a military unit for 180 days or longer.
To terminate the lease, the service member must:
- Provide written notice of the termination;
- Include a copy of his or her military orders; and
- Return the vehicle within 15 days of the notice.
Service members can't be charged extra fees for the early lease cancelation, but may still have to pay taxes, title, registration, and other fees, including charges for excessive wear and mileage due or unpaid on the date of the lease termination. Any advance payments made must be refunded within 30 days of the termination.
A sample automobile lease termination letter is available in the Attorney General's Military and Veteran Legal Resource Guide.
The Servicemembers Civil Relief Act (SCRA) 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 service member 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. A court may also stay repossession proceedings if it finds that the service member’s ability to comply with the contract is materially affected by military service.
The Washington State Motor Vehicle "Lemon Law" was enacted 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 Attorney General's Lemon Law Administration. If you are in the military and assigned to duty or living in Washington, a new vehicle brought with you from another state is also covered by Washington's Lemon Law, even if it was purchased or leased from another state, provided it meets the other standards and eligibility requirements.For more information about the Lemon Law, visit our Lemon Law website.
Disabled veterans, former prisoners of war and Congressional Medal of Honor recipients may be eligible for an exemption from certain vehicle license fees. Some individuals may also be eligible for special plates that do not have to be renewed.
In addition, the Washington Department of Licensing issues special veteran and military license plates along with service award plates, such as the Purple Heart. A portion of the fee for these specialty plates is used for activities that benefit veterans, such as maintaining the state veterans' cemetery and providing programs and services for homeless veterans.
Cellular phones are an integral tool in many of our lives, but, when you’re in the military, cell phone contracts may present challenges because of overseas deployments. While service members 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.
Cell Phone Contract Termination
The federal Servicemembers Civil Relief Act (SCRA) allows active duty military service members to terminate a cell phone service contract without having to pay early termination charges if :
- The service member receives military orders to relocate to a place where the service provider does not provide the coverage under the contract; and
- The service member will be in that location for 90 days or more.
To terminate the contract, the service member must:
- Provide written notice of the termination; and
- Include a copy of his or her military orders.
The termination is effective on the date the service provider receives notice. The law allows service members to retain their phone number. Family plans may be canceled if the family member moves with the service member.
A sample cell phone contract termination letter is available in the Attorney General's Military and Veteran Legal Resource Guide.
Managing credit and debt is important for everyone, particularly for military service members. Poor credit and excessive debt results in having to pay higher interest rates and can even prevent an individual from getting or retaining a security clearance. The Attorney General's Office provides useful information about credit and debt for service members, veterans, and civilians alike. Service members and veterans facing financial emergencies may also be eligible for federal or state resources.
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. Service members stationed outside the U.S.. or deployed overseas can order their free credit report by using this form.
6% Interest Rate Cap
The federal Servicemembers Civil Relief Act (SCRA) includes a provision capping the interest rates on most preexisting loans or obligations at 6% per year while a service member 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, which includes fees and other charges, in excess of 6% is forgiven during the covered period of active duty and cannot accrue or become due after service. However, the SCRA does not apply to obligations or debts incurred while on active duty.
To qualify for the 6% interest rate cap:
- The service member must currently be on active duty;
- The debt must have been incurred prior to entering active duty; and
- The military service materially affects the service member's ability to pay.
The SCRA interest rate cap is not automatic, but requests can be submitted anytime during active duty and up to 180 days after release from active duty. To initiate the interest rate reduction, the service member must:
- Send a written request to his or her lender;
- Show how military service materially affects the service member's ability to pay; and
- Include a copy of his or her military orders.
A sample interest rate reduction request letter is available in the Attorney General's Military and Veteran Legal Resource Guide.
Military Lending Act
The federal Military Lending Act requires that certain types of consumer credit offered to active duty service members and their dependents include certain protections. Under the law:
- Lenders are prohibited from securing the loan by holding a check or car title, or by 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 loan terms; and
- Interest rates and most fees are capped at an annual percentage rate (APR) of 36%.
In 2015, the Department of Defense issued a final rule amending the implementation of the Military Lending Act, and which takes effect in October 2015. Previously, the rule narrowly defined "consumer credit" so the law only covered payday loans, auto title loans, and tax refund anticipation loans. The amended final rule extends Military Lending Act protections to a broader range of credit products, including, for example, credit cards.
The federal Consumer Financial Protection Bureau enforces the Military Lending Act among other federal consumer financial laws.
In addition to federal protections, military borrowers of payday loans or "small loans" in Washington have protections under state law, which provides that payday lenders:
- Cannot garnish any wages or salary paid for service in the Armed Forces when attempting to collect a delinquent loan;
- Cannot contact the military chain of command to try to collect a delinquent loan;
- Must defer all collection activity against a borrower during any time he or she is deployed to a combat or combat support posting; and
- Must honor the terms of any repayment agreement made with the borrower, military counselors, or third-party credit counselors.
The state's collection agency law and the federal Fair Debt Collections Practices Act govern the conduct of collection agencies, which are businesses that collect debt for other businesses. The Attorney General's Office has tips for dealing with collection agencies and a list of prohibited behaviors at www.atg.wa.gov/collection-agencies.
Everyone is a potential identity theft target, but military personnel and veterans are particularly vulnerable, especially when deployed overseas. The Attorney General's Office 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 service members 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:
- Equifax: 1-800-525-6285; https://www.alerts.equifax.com
- Experian: 1-888-EXPERIAN (888-397-3742); https://www.experian.com/fraud/center.html
- TransUnion: 1-800-680-7289, http://www.transunion.com/personal-credit/credit-disputes/fraud-alerts.page
When you place an active duty alert, you'll be removed from the marketing lists of the credit bureaus for pre-screened credit card offers for two years. You may ask to be put back on the list earlier.
Shredding sensitive documents is one way to reduce your risk of becoming an identity theft victim. The Attorney General's Office maintains a calendar of free community shred events.
|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’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 Attorney General's Office.
The Attorney General's Office has a Scam Alerts website dedicated specifically to educating people about the latest scams.
Unfortunately, businesses and scammers try to take advantage of our nation’s military men and women by specifically targeting veterans and service members with bad deals and outright rip-offs. Here are some examples of scams involving or targeting veterans and military personnel:
- Veterans Pension Poachers – The Federal Trade Commission has issued a warning to older veterans about a scam that involves “poaching” veterans’ pensions. Unscrupulous “advisers” selling financial or legal products try to convince veterans to transfer assets to a trust or invest in insurance products so that they can qualify for VA Aid and Attendance benefits. What these "advisers" 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 messages 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 that information to commit identity theft.
- Veterans Charity Scams – Many legitimate charities solicit donations to support our nation’s veterans and the families of active duty military personnel. However, not all “charities” are legitimate. Some are sham operators whose only purpose is to make money by taking advantage of the goodwill afforded the men and women of our Armed Forces. The Attorney General's Office provides useful advice on how to avoid charity scams.
The federal Servicemembers Civil Relief Act (SCRA) provides a number of legal protections for military service members who are active in federal service. A similar state law protects military service members when they are on state active duty. These laws suspend certain civil obligations so that active duty service members 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 service members against default judgments, repossessions, and evictions;
- Obtaining stays or postponements of civil and administrative proceedings; and
- Giving service members the ability to terminate residential leases, automobile leases, and cell phone contracts in certain circumstances.
In 2014, the Washington State Legislature granted the Attorney General's Office the authority to enforce both the federal SCRA and the state version. Individuals concerned that their SCRA rights have been violated should file a consumer complaint in addition to contacting the nearest Armed Forces Legal Assistance Program office for individualized assistance.You may not be retaliated against for asserting your SCRA rights.