The Consumer Financial Protection Bureau, the federal agency tasked with enforcement of federal consumer financial laws, recently released a rather shocking report outlining the degree to which the brave men and women who serve in our nation’s armed forces are being subjected to improper and even illegal debt collection practices.
Indeed, the CFPB report determined that a whopping 46 percent of the complaints it received from both active duty servicemembers and veterans last year concerned debt collection, well ahead of the next complaint categories of mortgages and credit reporting.
What sort of activities are the focus of servicemembers’ complaints?
According to the CFPB, a considerable portion of the complaints it received concerned the unethical and illegal practice of debt collectors either threatening or actually contacting a servicemember’s commanding officer about the debt owed.
This is problematic for multiple reasons as it can adversely affect a person’s military career, compromising everything from their duty status and rise in the ranks to their security clearances and retention in their chosen branch.
In fact, the CFPB indicated that some servicemembers reported being so worried about these consequences that they paid the amount owed — despite the fact that they didn’t believe they actually owed any money.
Why are servicemembers so much more than likely than civilians to fall victim to these debt collection practices?
Experts theorize that some of the problem can be traced to the simple fact that servicemembers are often away from home or even deployed overseas for an extended period of time, such that it’s considerably more difficult for them to manage their finances.
Indeed, it’s easy to see how the failure to receive just one forwarded bill, or the inability to monitor credit reports or bank accounts could create serious problems in the form of unpaid debts — whether legitimate or not.
Is there anything servicemembers can do to protect themselves?
Fortunately, the CFPB indicates that servicemembers can at least protect themselves from having to deal with the fallout of debt incurred through identity theft by ensuring that an “active duty alert” is put on their credit files. This essentially means that lenders must take additional steps to authenticate their identity in the event of any applications for new accounts.
Here’s hoping that we make real progress in combating this problem sooner than later.
In the meantime, anyone who is experiencing serious money problems — and seemingly endless harassment from creditors — should be aware that they have viable options for securing a fresh financial start.