Combatting Military Financial Fraud

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You’ve dedicated your life to the country’s safety and security. The last thing you should worry about is your financial safety and security.

Unfortunately, financial scammers often target service members and their families. This guide can help protect you (and your loved ones) from financial ruin.

Common Scams Targeting Service Members

Scammers target service members with various frauds and ploys.

• Some offer cash-advance loans for cash-strapped service members. While they provide quick cash, they usually bear high annual interest rates if not paid on time.
• Other scams involve insurance, mutual funds, annuities, certificates of deposits, or military affinity fraud.

These scams often create financial difficulties, credit problems, and reduced troop morale.

Ten Dos and Don’ts

Use these guidelines to protect your financial security:

Do:

1. Do your research before investing. Check background information on financial companies and agents.
2. Do ask questions. Ask agents about potential commissions. If they avoid the question, back out.
3. Do check the registration and licensing status of any promoter, broker, investment advisor, or representative. Anyone selling securities in Massachusetts must be licensed and registered with the Securities Division. You can also check disciplinary records for any violations or complaints.
4. Do get a written copy of the investment before you invest. Make sure it clearly describes the terms and conditions, risks, service charges, and penalty fees. Avoid anyone who claims that they will “take care of everything for you.” You should control your own money.
5. Do file a report if you’re aware of investment fraud. Contact the Securities Division for help. Your report can protect other citizens from financial fraud.

Don’t:

1. Don’t trust any “guaranteed” return promises. All investing carries risk, and if someone promises high returns, they’re likely fraudulent.
2. Don’t make a quick, rash decision. Most scams rely on quick decisions without due diligence. Take time to research the investment, the promoters, and the risks.
3. Don’t invest more than you can afford. Know the risks and consult a financial professional before making a commitment.
4. Don’t be afraid to say no. Con artists prey on people who feel guilty rejecting sales pitches. Tell the salesperson you aren’t interested, and promptly end the conversation.
5. Don’t automatically accept offers from companies with military-sounding names and veteran salespeople. Fraudulent companies can use military connections to lure service members into investment and lending scams. Always do your research.

Contact the Securities Division at 800-269-5428 or securities@sec.state.ma.us.

We can help you:

• Confirm registration and licensing status for any salesperson or company
• Identify possible “red flags” with the solicitation
• Find free resources and information on common scams