Some servicemen and women serving abroad have found themselves not only facings the danger posed to them by their enemies, but threats on the home front from predatory financial practices aimed at them and their families.
Two military advocates with famous political ties – Holly Petraeus, the wife of CIA Director Gen. David Petraeus, and Delaware Attorney General Beau Biden, the son of Vice President Joe Biden – testified before Congress Tuesday to discuss the progress made to protect 1.2 million servicemembers from becoming the victims of scams and defending themselves from financial risks.
From her conversations with servicemembers on 27 military bases across the country, Petraeus, who joined the Consumer Financial Protection Bureau in 2011 as assistant director of the Office of Servicemember Affairs, found housing concerns, from delinquent mortgage payments to looming foreclosures, are top issues confronting military families. Often times, the servicemembers are not equipped with the financial education to protect themselves against these issues.
Petraeus said servicemembers are targeted by aggressive marketing practices from institutions of higher education, most often for-profit universities, and hounded by debt collectors preying upon military men and women, even citing one case where a widow was forced to immediately pay a debt upon her husband's death.
"We've seen a lot of practices that are really not ok, where they will call their place of business, their unit, repeatedly. Sometimes they will threaten to have them busted in rank. They'll threaten them with military justice which isn't theirs to administer, and in one of the worst cases I ever heard, they even hounded a combat widow that she needed to pay the debt immediately from the debt gratuity that she'd received when her husband was killed in combat," Petraeus said in an interview with ABC News.
Petraeus described the problems facing servicemembers when they seek loans over the Internet, which often have high interest rates, as well as auto title loans, with some lenders tacking on exorbitant service fees. She recounted the story of a servicemember who sought a 32-month loan for $1,600, paying over $500 a month. By the time the loan was complete, the service fees amounted to $15,000, all for a $1,600 loan.
Biden, who serves as attorney general in Delaware and is a member of the Delaware Army National Guard in the JAG unit, told ABC News that scam artists tend to target people who are vulnerable, have a steady source of income, like members of the military, and who deeply trust others.
"They go to people who are taught to trust others and rely on others. Sometimes these young men and women who serve our country so heroically and so patriotically, they trust people, and sometimes they're not as, don't have as some of the background with how they should take care of their money, and they become susceptible to and vulnerable to people who are fraudsters and scamsters," Biden told ABC News.
Biden, who completed a tour of duty in Iraq in 2009, said in the hearing before the Senate committee on Banking, Housing and Urban Affairs, that he witnessed first-hand the additional pressures placed on servicemembers facing foreclosure or financial problems while they are serving abroad, and he pressed the government to enhance financial protections for soldiers and their families while they are abroad.
"When you send a man or woman to go fight a battle for this country and off to war, they need to be focused on one thing, and that is doing the job, two things really--doing their job as their commander in chief tells them to do and two getting home safely to their family," Biden said.
Last week, financial regulators introduced new guidance that would help military members deal with mortgage companies when they have underwater loans or are forced to move to new bases for work. The new guidelines would alleviate servicemembers of the burden of having to sell their homes in difficult housing markets if they face a Permanent Change of Station order. An estimated 185,000 servicemembers are homeowners who receive PCS order each year.
Biden and Petraeus argued for the need to restructure financial education programs for new members of the military as well as make training and resources more accessible and work to expand programs to the Internet. Petraeus, who said she understands first-hand as a military spouse the hardships servicemembers and their families face, said she feels an obligation to protect servicemembers from predatory practices.
"It makes me very indignant. It makes me angry, and that's part of the reason I do this job because our servicemembers, we've asked so much of them, especially in the last 10 years. They're volunteers. They volunteered to go serve their country in a place where they may be at risk in their lives and the fact that they're being financially hassled here at home when they're doing that kind service for us, I don't think is OK," Petraeus said. "I feel like it's incumbent on me to see what I can do to protect them."
"I really do have to wonder about some of the people that apparently without conscience target the military to rip them off," Petraeus added. "There are people that just seem to -- it's all about money and they don't care how they get it."
Attorneys general across the country are working to protect service men and women from predatory practices in the financial industry, and Biden sent a warning to those engaging in such practices.
"If you don't follow the law in any given state or a federal law, then you're going to have state authorities and or federal authorities coming after you for making sure you don't rip off some of the most capable and patriotic people serving this nation as we speak," Biden said.