The Consumer Financial Protection Bureau said in a report released June 19, 2023, that moving regularly makes service members more likely to be victims of identity theft and fraud through digital payment applications than their civilian counterparts. (Tyler Mitchell/U.S. Army)
Service members are more susceptible to identity theft and getting scammed out of money on digital payment applications than their civilian counterparts, according to a new government report that found a sharp rise in consumer complaints from the military community.
The Consumer Financial Protection Bureau, in a report released Monday, said service members, veterans and their families in 2022 submitted nearly 66,400 complaints to the government agency — a 55% increase from the previous year.
And one of the fastest growing areas was complaints about increasingly popular digital payment apps, where military members have encountered scams that suggest “a rapidly growing financial threat to military families,” the report stated.
“Service members report serious financial harm from scams and fraud when using payment apps,” the report said. “Often during a permanent change of duty station, service members face the need to secure housing, a new automobile or day care during a short window, which often requires them to conduct more online transactions.”
The transient nature of military life is part of what makes military members more vulnerable.
Service members typically move every few years, which requires them frequently to share a wide range of personal and financial information as they establish themselves in new communities.
Unlike civilians, who normally can meet face-to-face or physically inspect the goods or service, on-the-move service members frequently can’t do the same because of military duties, the report said.
In addition, scammers increasingly are listing houses for rent that do not exist, leading unsuspecting military families to send money for a rental deposit or advance payment, the report added.
The CFPB said digital payment app providers need to do a better job of providing timely resolutions to complaints from service members, who the agency said are struggling to get their money back from unauthorized transfers.
To address these “emerging risks,” the report recommended that digital payment app providers improve the safety and security of their networks to prevent fraud; improve their responsiveness when fraud occurs; and tailor policies on refunds in a way that recognizes the unique experiences of military families.
“Digital payment app providers should recognize these challenges and take a comprehensive approach to reimbursement when all types of fraud occur,” the report said.
